Business
NFRA Imposes Rs 2 Crore Penalty on Deloitte Haskins for Audit Lapses
The National Financial Reporting Authority (NFRA) has imposed a ₹2 crore penalty on Deloitte Haskins & Sells LLP for lapses in auditing Zee Entertainment Enterprises Limited (ZEEL). The authority uncovered serious violations, including the misappropriation of funds and unauthorized transactions without shareholder approval.

The National Financial Reporting Authority (NFRA) has levied a Rs 2 crore penalty on Deloitte Haskins & Sells LLP and a Rs 15 lakh penalty on two chartered accountants for professional misconduct in the audit of Zee Entertainment Enterprises Limited (ZEEL) for the financial years 2018-19 and 2019-20. The regulatory body also imposed a Rs 8 lakh penalty on two chartered accountants involved in the audit of DB Realty and barred them from practice for five and three years, respectively.
The NFRA’s investigation into ZEEL’s audits revealed glaring lapses by Deloitte and its auditors. ZEEL was found to have misappropriated funds and conducted unauthorized transactions with related parties without obtaining approvals from its audit committee, board of directors, or shareholders. These transactions, according to NFRA, pointed to a lack of due diligence on the auditors’ part.
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Key red flags ignored by the auditors included:
- The role of promoters in financial mismanagement.
- Improper appropriation of fixed deposits.
- Suspicious transactions between ZEEL and other group companies.
NFRA strongly criticized Deloitte, stating, “The auditors failed to exercise due diligence and neglected their professional duties as required under statutory norms.”
In response, a spokesperson for Deloitte said, “We are reviewing the NFRA order and remain committed to maintaining the highest standards of audit quality.”
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Separately, the NFRA also finalized its inspection reports for BSR & Co. LLP, a KPMG sub-licensee, and Lodha & Co. While BSR & Co. was acknowledged for implementing measures to improve audit practices, deficiencies in verifying related-party transactions in some engagements were flagged. Lodha & Co., which audits over 60 public interest entities, was advised to enhance its independence monitoring, audit documentation, and client acceptance protocols.
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