Penalty of Rs. 1.10 Cr and 2 year ban Imposed on CA and CA Firm for Audit Lapses:

The Auditor is guity of not reporting fraudulent diversion of funds, just to preserve their professional relationship with the promoters of the auditee company.

Professional Misconduct

CA Pratibha Goyal

May 31, 2023

Last update on May 31, 2023

Penalty of Rs. 1.10 Cr and 2 year ban Imposed on CA and CA Firm for Audit Lapses The National Financial Reporting Authority (NFRA) in the matter of GVIL against Sundaresha & Associates, CA C Ramesh, and CA Chaitanya G Deshpande under Section 132(4) of the Companies Act 2013 for the FY 2019-20 has imposed a Penalty of Rs. 1.10 Cr and 2-year ban on CA and CA Firm for Audit Lapses.

The Auditors had access to the investigation report of Mr. Ashok Kumar Malhotra which had complete details of the diversion of funds, and modus of operandi including the signing of blank cheques. Despite, this, they did not report fraudulent diversion of funds, just to preserve their professional relationship with the promoters of the auditee company.

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About Author

CA Pratibha Goyal

Co Founder

CA Pratibha Goyal is Chartered Accountant qualified in 2016, is a Member of The Institute of Chartered Accountants of India having wide experience in the field of Auditing, Taxation, ROC, GST and Secretarial matters etc. She has written over a thousand articles & has made several videos on topics related to Auditing & Taxation. As a Speaker she has delivered various sessions on various branches of NIRC of ICAI.