NEW DELHI: The National Financial Reporting Authority (NFRA) has imposed a fine of Rs 2 crore on Deloitte Haskins & Sells LLP as well as penalties on two chartered accountants for lapses in the auditing of Zee Entertainment Enterprises Ltd during the 2018-19 and 2019-20 financial years.
Along with slapping a fine of Rs 10 lakh, A B Jani has been barred from taking up any audit work for 5 years, while the fine is Rs 5 lakh on Rakesh Sharma, and the debarment period is 3 years.
Jani was the Engagement Partner (EP), and Sharma was the Engagement Quality Control Review (EQCR) Partner for the audit of the company for 2018-19 and 2019- 20.
The regulator had suo motu examined the audit file for the statutory audit of Zee Entertainment Enterprises Ltd (ZEEL) for the given periods to assess whether the auditor committed any professional misconduct.
After examining the audit file and responses of the audit firm to its queries as well as other records, NFRA said prima facie auditors had not discharged their professional duties under the Companies Act as well as the Standards on Auditing (SA).
In its 30-page order dated December 23, NFRA said auditors failed to meet the relevant requirements of the SAs and violated the Act in respect of certain significant related party transactions.
The watchdog has imposed a monetary penalty of Rs 2 crore on Deloitte Haskins & Sells LLP, apart from penalties on Jani and Sharma.
Both individuals have been debarred 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,” for varying periods.
The ban on Jani and Sharma is for 5 and 3 years, respectively.
A Deloitte spokesperson said it has received the NFRA order against the firm and two retired partners.
“We are currently reviewing the order to determine our next course of action,” the spokesperson said in a statement.
