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NFRA flags deficiencies in BSR & Co's audit of Related Party Transactions
The National Financial Reporting Authority (NFRA) identifies significant deficiencies in BSR & Co LLP's audit practices, focusing on related party transactions. The audit regulator's August 2024 inspection found lapses in compliance with auditing standards and the Companies Act 2013, revealing undocumented business rationales and potential violations involving substantial financial transactions.
New Delhi: The National Financial Reporting Authority (NFRA) has highlighted significant shortcomings in the audit practices of BSR & Co LLP, a KPMG sub-licensee, particularly in related party transactions. The audit regulator's inspection was conducted in August 2024, which reviewed three BSR audit engagements from the FY ending March 2022 and March 2023.
In a 13-page inspection report, NFRA found lapses related to auditing standards and compliance with the Companies Act 2013. Among the critical observations were deficiencies in verifying related party transactions.
The inspection report also revealed a complex series of transactions initiated by an unnamed company, involving its promoter entity.
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