NFRA penalizes Deloitte for audit lapses at ZEEL, highlighting the need for improved corporate governance and auditor accountability.

NFRA has alleged in its order that despite the materiality of the transaction, which required rigorous examination, Deloitte issued unmodified audit opinions for both financial years.

NFRA found that ZEEL had misappropriated its money and made unauthorised transactions with related parties without the approval of the audit committee, the board, and shareholders

Jani was the Engagement Partner (EP), and Sharma was the Engagement Quality Control Review (EQCR) Partner for the audit of the company for 2018-19 and 2019- 20.In its probe, NFRA found Deloitte and CA AB Jani committed professional misconduct under provisions of the Companies Act,

The firm was accused of not exercising professional scepticism, due diligence, and failing to challenge management's assertions. Deloitte also failed to adequately evaluate reports of suspected fraud.

The penalty against Deloitte stems from its alleged failure to detect and report irregularities concerning a Rs 200 crore fixed deposit held by ZEEL in Yes Bank. ZEEL's Chairman reportedly pledged this fixed deposit as a guarantee for loans extended by the bank to a promoter group company,

The regulator examined the audit file for Zee Entertainment Enterprises (ZEEL) and found that auditors failed to meet professional standards and violated the Companies Act regarding significant related party transactions,

The National Financial Reporting Authority (NFRA) has slapped a penalty of Rs 2 crore on Deloitte Haskins & Sells LLP, along with a fine on two chartered accountants for lapses in the audit of Zee Entertainment Enterprises Ltd (ZEEL).