Former Deloitte Haskins and Sells LLP Chief Udayan Sen have been forbidden from pursuing his auditing work by National Financial Reporting Authority (NFRA) for seven years. A monetary penalty of Rs. 25 lakh has also been imposed for auditing lapses at Infrastructure Leasing and Financial Services Ltd. (IL&FS)

While pronouncing its order, NFRA found the former Deloitte chief guilty on several counts of professional misconduct which is briefly highlighted alongwith examples at suitable places as follows:

• Failed to disclose material facts in financial statements known to him. For instance, IL&FS had actually suffered a loss in the year 2017-18, but it reported it as a profit.


• Failed to report material misstatements in IL&FS accounts. For example, IL&FS was not complying with risk weighted coverage ratio and net owned funds.


• Failed to exercise due diligence. For instance, failed to evaluate management’s assessment of IL&FS being a going concern.


• Showed gross negligence. For example, ignoring the consistent reduction in profits since March 2014 and its consequent effect on the declining Cash and Cash equivalents.


• Failed to obtain sufficient information necessary for expressing an opinion.


• Failed to mention material departure from acceptable audit procedures.


• And, finally, serious lapses of duty by the auditor.

 

It has also been observed by NFRA that since he was the managing Partner and CEO of Deloitte for several years, he should have been aware of and be alert to anything that could have effect his and his firm’s independence.

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