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NFRA Slaps Penalty of Rs 2 Cr on Auditors of Cafe Coffee Day, Debars CAs
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| Posted Date : 12-Oct-2024 , 09:35:04 am | Posted By CASANSAAR |
The National Financial Reporting Authority (NFRA) on Thursday slapped a penalty of Rs 2 crore on the statutory auditor and Rs 15 lakh on two chartered accountants for professional misconduct in the audit of Coffee Day Enterprises Limited (CDEL) in FY 2019-20.
NFRA in its Thursday order has debarred the two chartered accountants involved in the audit for a period of 10 years and five years respectively from being appointed as an auditor or internal auditor or from undertaking any audit in respect of financial statements or internal audit of the functions and activities of any company or body corporate.
“Despite having all material on record and having access to books of account and records of all subsidiaries of CDEL, the auditors did little in terms of audit procedures to alleviate the risk of material misstatement and fraud,” the NFRA order said.
NFRA said that Venkatesh & Co. accepted the audit engagement as statutory auditor of CDEL from FY 2019-20 without first performing mandatory procedures and started audit activities even before obtaining no objection certificate from the resigning auditor - BSR & Associates.
NFRA found that the auditors deliberately chose to shy away from their statutory duty to report the fraud and protect the public interest.
NFRA was suo moto examining the matter after an investigation report regarding diversion of funds worth Rs 3,535 crores from seven subsidiary companies of Coffee Day Enterprises Limited to Mysore Amalgamated Coffee Estate Limited (MACEL) was shared with them by the Securities and Exchange Board of India (Sebi).
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Category : NFRA |
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