NFRA slaps a penalty of Rs. 2 crore on Deloitte Haskins for ZEEL audit
The National Financial Reporting Authority (NFRA) has slapped a penalty of Rs. 2 crore on Deloitte Haskins & Sells LLP and total penalty of Rs. 15 lakh on two chartered accountants (CAs) for professional misconduct in connection with the audit of Zee Entertainment Enterprises (ZEEL) for the financial years FY19 and FY20.
In the matter of ZEEL, NFRA found that the auditors ignored several red flags and did not take into account critical factors such as the role of promoters, the basis for appropriation of fixed deposit and transactions between ZEEL and other group companies. NFRA also found that ZEEL had misappropriated its money and made unauthorised transactions with related parties. This was done without approval of the audit committee, the board and shareholders. As per NFRA order, we have reasons to believe that the auditors did not exercise due diligence in ensuring the audit quality expected in an audit of a public interest entity and were grossly negligent in the conduct of professional duties by not adhering to the requirements as laid down by the relevant statutes.
