NFRA’s inspection has found audit firm Walter Chandiok & Co non-compliant with the independence requirement since it did accept being part of the Grant Thornton network.
The NFRA’s report, released on Friday, said the NAS policy framework during FY24 was applicable only to Deloitte India entities.
Deloitte Haskins & Sells, in its response, has asked NFRA to provide mandatory guidance on management services not allowed under Section 144 of the Companies Act.
The audit firm stated that the recent Institute of Chartered Accountants of India (ICAI) international networking guidelines mention that the applicability of Section 144 is only on domestic networks.
“NFRA is suggesting it should apply to other international independent firms in the global network,” the audit firm said.
The authority also advised Deloitte to ensure separation between the management representation letter for standalone financial statement and the auditor’s conclusions to maintain auditor independence and objectivity.
In its inspection report for Walker Chandiok, NFRA said, “There is a need for systemic improvement to ensure independence declaration by every team member and its documentation in the audit tool, before signing off the engagement.”
The firm has told NFRA that it is compliant on auditor independence and had confirmed its membership of the GTIL network with effect from March 2026.
Section 144 of the Companies Act is meant to ensure auditors independence by prohibiting statutory auditors from providing non-audit services to their client companies, holding companies, or subsidiaries.
NFRA’s review covers select audit documentation for the annual statutory audit of financial statements for the year ending March 31, 2024.
The authority also released inspection reports of four other audit firms, including Singhi & Co, CNK & Associates, Umamaheshwara Rao & Co and BDG & Co LLP.
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