The National Financial Regulatory Authority has imposed penalties on 18 branch auditors of Dewan Housing Finance Corporation Ltd following investigations into their professional conduct.
The penalties are cumulatively Rs 18 lakh and debarment ranging from six months to one year, as per the 18 separate orders by the NFRA. Of the 18 auditors, 14 have been debarred for a period of one year and the others for six months.
The audits were appointed as engagement partners for statutory audit of various DHFL branches in the fiscal year 2017-18, according to NFRA regulations.
Following media reports on the alleged banking fraud of around Rs 31,000 and the reported action of the Enforcement Directorate in April 2020 on an alleged banking fraud of about Rs 3700 by the promoter and directors of DHFL, NFRA took Suo motu notice of the matter and conducted an audit quality review. In addition, the Independent Branch Auditors' report for nearly 250 branches was found. The NFRA's recommendations included numerous cases of audit lapses and professional misconduct by auditors.
NFRA is a statutory body that monitors and enforces compliance of auditing and accounting standards, and oversees the quality of services of the professions associated with ensuring compliance with such standards. NFRA has the power of a civil court.
In April this year, the NFRA imposed a ban and monetary penalties of a total of Rs 4 lakh against four partners of a audit firm engaged by DHFL for professional misconduct.
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