Quick Summary
NCLAT Empowers NFRA to Retroactively Penalize Auditors: Landmark Ruling in DHFL Case In a groundbreaking verdict, the National Company Law Appellate Tribunal (NCLAT) has affirmed the National Financial Reporting Authoritys (NFRA) authority to retrospectively oversee and take punitive action against Chartered Accountants for misconduct predating its establishment in October 2018. This ruling grants NFRA, the countrys exclusive independent audit regulator, the power to penalize auditors and aud
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FAQ :
Yes, the NCLAT has confirmed that NFRA has the authority to retrospectively oversee and take punitive action against Chartered Accountants for misconduct that occurred before its establishment in October 2018.
NFRA is the country's exclusive independent audit regulator.
The landmark ruling was made in appeals filed by Branch Auditors of Dewan Housing Finance Ltd (DHFL).
NFRA had imposed penalties of ₹1 lakh and a one-year debarment on each of the four auditors for professional misconduct in the DHFL branch audit work.
The NCLAT ruling emphasised that Standards of Auditing are mandatory, not advisory, and apply to all audits, including branch audits.
Yes, NFRA holds superior and overriding powers in matters related to professional misconduct of chartered accountants, particularly concerning listed entities and certain other companies.
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