NFRA flags documentation gaps in some Big Four firms – Times of India

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New Delhi: The National Financial Reporting Authority (NFRA) on Friday released its first inspection report of firms that are part of the Big Four network of audit firms, pointing to gaps in several places, including the way audit papers are preserved. and including compliance with its provisions. The Companies Act and set standards.
“This is a process that is followed in other countries, including the US and the UK, and we are not trying to discipline or find fault with firms. The idea is that those followed by firms Understanding the process… If the process is sound, the quality of the audit will be good. The aim is to change the quality across the firm so that shareholders have peace of mind in the audited accounts of companies.” An NFRA official said. This year, NFRA picked up and evaluated audits conducted by randomly identified firms. The inspection will be an annual exercise in which firms will be selected by rotation.

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The first set of inspection reports noted that Price Waterhouse Chartered Accountants (PWCA) had voluntarily limited non-audit services to non-audit clients, its subsidiaries and its material overseas associates. There were some deficiencies related to the work and process of its audit, which were noted in the inspection report.
Conversely, in the case of S. R. Batliboi (SRBC), an affiliate of EY, the regulatory agency noted that the firm’s policies did not recognize the direct and indirect relationship between SRBC and its international network EY’s network members, which would violate certain provisions of the Companies Act. There was a violation of the provisions.
It pointed to several other gaps, including those related to audit documentation. Commenting on the report, SRBC said: “We are committed to delivering sustainable, consistently high quality audits and find the NFRA recommendations very constructive in support of the objective of enhancing audit quality. Quality control, governance, With our firm’s strong focus on talent, systems, tools and procedures, we are committed to maintaining the trust of stakeholders. We are all professionals to serve the public interest and maintain confidence in the audit profession. Looking forward to working with the institutions.”
The inspection report on BSR & Co, which is part of the KPMG network, said the firm did not provide details of network entities and non-audit services provided to audit clients. He also pointed to the creation of audit papers, inadequate control over changes and revisions, and the absence of formal documentation and explanations regarding the firm’s governance and management structure.
In the case of DHS (Deloitte Haskins & Sells), NFRA pointed to at least one case where the audit firm also provided non-audit services “that were equivalent to self-review risk”.

Business news,United Kingdom,S. R. Batliboi,Price Waterhouse Chartered Accountants,National Financial Reporting Authority,The Companies Act,BSR & Co
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