May 19, 2024

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RBI bars Srei Infrastructure auditor Haribhakti & Co for two years

The Reserve Bank of India (RBI) on Tuesday debarred audit firm Haribhakti & Co from enterprise audit assignments in any of the banking and non-banking economical firms (NBFC) for two a long time setting up April 1, 2022 for failing to comply with its path.

Haribhakti was the auditor of SREI Infrastructure Finance (SIFL), a mentioned firm, for 2019-20. The RBI superseded the boards of SIFL and Srei Tools Finance (SEFL) on October 4 around governance considerations and payment defaults.

“This action has been taken on account of the failure on the component of the audit firm to comply with a distinct path issued by RBI with respect to its statutory audit of a systemically important non-banking economical corporation,” a statement uploaded on the RBI site claimed.

The audit firm, which is also a normal auditor of important financial institutions, such as state-owned financial institutions, has been debarred beneath section 45MAA of the Reserve Bank of India Act. This is the first time that any auditor has been implicated beneath this act, a source claimed.

The RBI Act 45MAA talks about steps that can be taken if section 45MA is not adhered to. Part 45MA talks about the obligations of an auditor of an NBFC.

It suggests an auditor of an NBFC would be responsibility-sure to inquire no matter if the firm getting audited has furnished all the facts on its deposits, property, and liabilities, revenue-and-decline account, etcetera. to the RBI that would sort the basis of disclosure related guidelines, or even exclusive audit by the central bank on the firm.

The RBI’s communication indicates that the audit firm failed to do so, major to the two-year debarment.

Nevertheless, the action will not influence Haribhakti’s auditing assignments for the latest fiscal 2021-22, the RBI claimed.

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