National Financial Reporting Authority (NFRA) barred former Deloitte partner Udayan Sen

NFRA had issued a show cause notice to Sen on January 17 asking why action should not be taken against him for professional misconduct in terms of his performance as the engagement partner in the statutory audit of IFIN in 2017-18. In response Sen had filed a writ petition in the High Court in February. 

NFRA  said that professional misconduct becomes very serious when the CA has gone along with the management of the company in agreeing to misstatements so as to commit a fraud on the users of the financial statement.

In its earlier report in this matter NFRA said that "the auditor did not display the required professional scepticism and accepted the management stand about not disclosing that net-owned funds and the capital to risk-assets ratio of IFIN as of March 31, 2018 were negative, and that this situation would lead to the cancellation of the company’s licence to operate as a non-banking financial company."

Instead, Deloitte Haskins accepted the explanations of the management and certified these ratios as positive, it said.

NFRA on Wednesday imposed a seven-year audit ban and also imposed a 2.5 million rupees ($33,500) fine on Udayan Sen for professional misconduct while inspecting the books of IL&FS Financial Services Ltd (IFIN) for the 2017/2018 financial year.

The financial reporting authority has also barred Sen from taking any audit in respect of financial statements or internal audit of the functions and activities of any company for professional misconduct.

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