The National Financial Reporting Authority, subsequent to a Show Cause Notice issued to Chartered Accountant Gulshan Jagdish Jham asking him to show cause as to why action should not be taken against him for professional misconduct in respect of his performance as the statutory auditor of Prabhu Steel Industries Limited (PSIL), a listed company for the financial year 2019-2020, found the CA guilty of the charges.
The Chartered Accountant(CA) was imposed with a penalty of Rs. 1,00,000/- and his name was debarred from being appointed as an auditor or internal auditor or from undertaking any audit.
The actions and omissions leading to the guilty verdict of the Authority comprising Praveen Kumar Tiwari and Smita Jhingran were listed out. It was observed that, in the opinion part of the Independent Auditor’s Report, the conformity of the financial statements with the accounting principles generally laid down in india.
Lack of Compliances with Indian Accounting Standards (Ind AS) were found out to have been left unreported in the audit by the CA. The Standard on Auditing (SA) 210, 250 and 700 were violated by the Chartered Accountant who was obliged to comply with the same.
The violations of SA 200 and SA 210, regarding the acceptability of applicable financial reporting framework and compliance with the same; SA 250, regarding compliance with laws and regulations and SA 700, regarding expressing his opinion on the true and fair view of Financial Statements and ultimately, the false statement of the CA that he had conducted the audit in accordance with the SAs were observed to be gross violations of the professional ethics.
The CA Gulshan Jagdish Jham was thus subjected to a monetary penalty of Rupees One Lakh and was debarred for one year from undertaking audits by the NFRA under Section 132(4) of the Companies Act, 2013.
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