ICAI CCM Dhiraj Khandelwal Clarifies On NFRA Order of Rs 1 Crore Penalty

In a recent development, CCM Dhiraj Khandelwal has addressed the concerns on 'X' surrounding the NFRA order imposing a significant penalty on Audit Firm M/s Dhiraj & Dheeraj. Amidst the controversy, Khandelwal provides a detailed clarification, shedding light on the facts and nuances of the case.

Key Points from Khandelwal's Statement

• Difference of Opinion on Audit Opinion: Khandelwal emphasizes the divergence between the adverse opinion as per NFRA and the qualified opinion as per the auditor, highlighting the subjective nature of the issues involved.
• ECL Provision Judgment: The adequacy of the Expected Credit Loss (ECL) provision judgment on standard loan assets, including overdue loans, is identified as a judgmental issue, underscoring the complexity of the matter at hand.
• Audit Planning Meeting: Issues regarding the timing of the audit planning meeting between the NOC requested from the previous auditor and the one received are raised, suggesting potential procedural discrepancies.
• Agreement on Audit Issues: Khandelwal mentions an agreement between EP and EQCR on significant audit issues after detailed discussions, albeit lacking documentation, indicating a need for clarity in communication protocols.
• Resigned Auditor's Reports: The discrepancy between a clean report issued by the resigned auditor in previous years and periods before filing under section 143(12), and a qualified report, is highlighted, raising questions about the consistency of audit findings.
• Qualified Report on Previous Transactions: Khandelwal addresses the issuance of a qualified report for all loans sanctioned and disbursed before appointment, juxtaposing it against the unmodified opinion issued by the previous auditor, suggesting potential inconsistencies in assessment criteria.

 

 

 

 

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In addition to addressing the specifics of the NFRA order, Khandelwal reminisces about his longstanding opposition to NFRA, reflecting on his past involvement in council and a detention by Mumbai police due to protest actions.

This clarification offers valuable insights into the intricacies of the case, underscoring the need for a thorough examination of audit processes and regulatory frameworks.