NFRA penalises auditor for lapses in Sobha audit case
The National Financial Reporting Authority (NFRA) has imposed a penalty of Rs 5 lakh on Supreet Sachdev, an auditor who works at BSR & Co. LLP. This penalty is because he made mistakes during the audit of Sobha Ltd. for 2017–18 and 2018–19. The NFRA took this action after getting a complaint from the Securities and Exchange Board of India (SEBI) about Sachdev’s misconduct in the Sobha audit.
The investigation found that Sachdev didn’t follow proper audit rules. He didn’t report uncertainties about recovering a large sum of money related to land deals. These land deals had unclear legal titles and were involved in legal disputes. Sachdev also didn’t report problems with the way the company handled these transactions, like not keeping records, monitoring them, or getting confirmations. Even though he knew SEBI was looking into these transactions, he didn’t provide enough proof during the audit. Furthermore, in his audit report for 2018–19, Sachdev didn’t address SEBI’s concerns. These were the grounds for the above action against him.