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

Deloitte’s auditors failed to detect and report this misrepresentation in the company’s financial statements, according to the NFRA.

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 NFRA has fined Deloitte Haskins & Sells LLP Rs 2 crore and imposed penalties on two auditors for failing in their audit duties for Zee Entertainment Enterprises Ltd during 2018-2020. The auditors have been barred from undertaking audit work for 5 and 3 years respectively,

The National Financial Reporting Authority (NFRA) has reportedly imposed a Rs 2 crore penalty on Deloitte Haskins & Sells for audit lapses in Zee Entertainment Enterprises Ltd (ZEEL) in the FY2018-19 and FY19-20.

Financial Watchdog NFRA Fines Deloitte Rs 2 Crore Over Zee Audit

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.