COMPANIES ACT, 2013

Section 143

Powers and duties of auditors and auditing standards - CA neither conducted audit as per Accounting Standards nor reported material misstatements in financial statements - CA being guilty of professional misconduct proved by evidence on record - Imposition of penalty

Authority issued show cause notice to CA for violation of section 143, as the company had not complied with Accounting Standards in preparation and presentation of its Financial Statements, which resulted in material mis-statements of various figures and disclosures, but the same was not disclosed by the CA in his audit report. Further, the CA had also reported the cash flow statement had been audited, but the company's Financial Statements did not contain the cash flow statement. Held: Evidence on record proved that the CA failed to conduct the audit in accordance with the SAs and applicable regulations, failed to report the material misstatements in the financial statements and failed to report non-compliances made by the company. The CA was guilty of professional misconduct. Therefore, monetary penalty was imposed upon the CA and he was also debarred for five years being appointed as an auditor or from undertaking any audit in respect of financial statements or internal audit of the functions and activities of any company.

REFERRED :

FAVOUR : Against the noticee

A.Y. :

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