MahaRERA issued SCN to Chartered Accountant for Violation of Regulations

The Maharashtra Real Estate Regulatory Authority (MahaRERA) issued a Show Cause Notice to a chartered accountant for violating the Real Estate (Regulation and Development) Act.

Furthermore, the authority notified the Institute of Chartered Accountants of India (ICAI) about the situation and instructed accountants to comply with real estate regulations.

To withdraw funds, promoters must present Form 3 that has been validated by the project auditor as being in accordance with MahaRERA laws. In addition, the Statutory Auditor must provide a Statutory Audit Report. Regulations made it quite clear that it had to be done by a team of accountants or accounting companies.

However, the MahaRERA investigation discovered numerous inconsistencies in the UDIN numbers provided by the Chartered Accountant. When the documentation of the promoters were examined, it was discovered that the form and the Statutory report were both prepared by the same chartered accountants. The Chartered Accountant worked as both a Project and Statutory Auditor.

The authority keeps track of all registered projects and agents, and it also provides a method for investors and buyers to report developers and agents who they believe have violated the Real Estate (Regulation and Development) Act.

According to the reports, it was required to detect audit gaps, so it was ordered that the Project auditor and the Statutory auditor be separate. If they are both the same person, there is a suspicion that the promoters are hiding something.

A chartered accountant cannot perform two distinct activities at the same time, according to the law. The statutory auditor for the project may not be the auditor in charge of the project. Anyone who does this is undoubtedly breaking the law.