New Delhi, March 27 The National Financial Reporting Authority (NFRA) on Friday flagged certain shortcomings in inspection reports related to the auditing work of six audit firms and their affiliates.
The inspection reports pertain to Deloitte Haskins & Sells & Affiliates, Walker Chandiok & Co LLP, Umamaheswara Rao & Co, B D G & CO LLP, Singhi & Co, and CNK & Associates LLP.
In the report on Deloitte Haskins & Sells & Affiliates, the NFRA said that the audit firms' Non-Audit Service (NAS) Policy applies only to Deloitte India entities, lacking safeguards against prohibited NAS by non-India network firms to Indian clients' group entities.
It also made observations related to the individual audit engagements.
Among the issues, the NFRA, in the inspection report on Walker Chandiok & Co LLP, said that there was a need for systemic improvement to ensure that every team member makes an independence declaration and documents it in the audit tool before signing off on the engagement.
"The firm's monitoring process exhibited a lack of formal and documented communication of deficiencies identified during Internal Quality Control Reviews (IQCR) to the respective engagement partners," the report said.
Regarding Umamaheswara Rao & Co, the watchdog's inspection report mentioned certain aspects, including that the firm may strengthen its monitoring mechanism.
According to the regulator's report on B D G & CO LLP, certain aspects of SQC (Standard Quality Control) compliance require strengthening, and that improvements are also needed in documentation concerning client acceptance and continuance procedures, review of audit work, and monitoring process, among other aspects.
Regarding Singhi & Co, the NFRA report said that the firm is required to implement measures for continuous monitoring of personal independence declarations made by the members of the firm towards their investments.
Other observations include the need to strengthen the firm's policy and practice, and that the firm's audit documentation needs to be further strengthened.
In the report on CNK & Associates LLP, the regulator mentioned various issues, including that the firm needs to strengthen its policies, procedures, and controls relating to audit documentation, and that it has to strengthen the policy relating to engagement quality control review.
The audit quality inspections for these firms were initiated in 2025.
