Chartered Accountant Debarred by NFRA for lapses in Audit

The National Financial Reporting Authority (NFRA) banned chartered accountant Som Prakash Aggarwal on Monday due to shortcomings in the audit of Vikas WSP, a publicly listed company that manufactures and exports guar gum powder.

The chartered accountant was also fined Rs. 3 lakh by the independent agency that controls the auditing and accounting businesses. The move occurred as a result of information the market regulator NFRA obtained from the Securities and Exchange Board of India (Sebi) suggesting possible errors in Som Prakash Aggarwal’s audit work for 2019–20.

During its investigations, NFRA found that the CA failed to disclose interest rate non-recognition for corporate borrowings that banks had labelled as non-performing assets. This was crucial because Vikas WSP indicated that curiosity value made up 88% of his pre-tax income.

NFRA ruling further stated that when performing a statutory audit, the CA neglected to take important requirements of Indian accounting standards into account.

The NFRA ruling stated that “CA Som Prakash Aggarwal failed to conduct the audit in conformity with the SAs (standards of auditing) and applicable rules.” Additionally, according to the study, he neglected “to disclose the substantial misstatements and non-compliances committed by the Company in the Financial Statements.”