NFRA bans CA Udayan Sen from Auditing for 7 years

The National Financial Reporting Authority has taken stringent action against a high-profile chartered accountant with the Big 4 Audit Firms, Udayan Sen, for his role as engagement partner in the statutory audit of ILFS Financial Services Limited. The authority has barred Sen from practising for 7 years and has also slapped a penalty on him for Rs 25 lakhs.

The NFRA has clarified that the CA has indulged in misconduct along with the management of the company. The company incurred losses in 2017-18 but in the audit, unfair means were adopted to show that it has actually earned profits.

Background

NFRA had sent a notice to CA Udayan Sen in January 2020 asking him why his actions should not be penalized by the authority. He was the engagement partner for Deloitte for the statutory audit of ILFS Financial Services for the year 2017-2018. His actions were questioned by NFRA in that notice itself and now it has come out with its decision regarding the case.

Sen had stepped down as the CEO of Deloitte India in 2015 and also retired from the firm as a partner in 2020.

National Financial Reporting Authority

NFRA was constituted in 2018 as per the provisions of the Companies Act 2013. The main idea was to create an independent regulator that will look into the misconducts and frauds by the companies. NFRA consists of a chairperson who is appointed by the central government and a maximum of 15 members. It is mandated to recommend accounting and auditing policies and standards to be adopted by the companies. It also has the powers to probe listed companies and also certain unlisted companies.

Month: Current Affairs - July, 2020