Regulatory Risk

Debarred Auditor Associated with Portfolio Companies – A Potential Red-flag

In this blog post, we present an interesting use-case of news and auditors’ data from a portfolio monitoring perspective.

The Reserve Bank of India (RBI) has debarred M/s Haribhakti & Co. LLP, Chartered Accountants (ICAI Firm Registration No. 103523W / W100048) on Tuesday, October 12, from undertaking any type of audit assignment/s in any of the entities regulated by the central bank for a period of 2-years with effect from Apr. 1, 2022.

“This action has been taken on account of the failure on the part of the audit firm to comply with a specific direction issued by RBI with respect to its statutory audit of a Systemically Important Non-Banking Financial Company,” the central bank said. “This will not impact audit assignment/s of M/s Haribhakti & Co. LLP in RBI regulated entities for the financial year 2021-22,” the RBI added.

Amukha’s Risk Analytics System (RAS), an innovative early warning System, has captured the said press release – “Action against Statutory Auditors of NBFC under section 45MAA of RBI Act, 1934” from the RBI website.  

Moreover, our EWS application can also link debarred or blacklisted auditors spotted through news data to identify the companies associated with such auditors from the portfolio.

Here, we highlight one such company – Centrum Financial Services Ltd which is associated with the debarred auditor Haribhakti & Co. LLP.

If you were unable to spot such red-flags, Amukha can help you!

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