The National Financial Reporting Authority (NFRA) has identified deficiencies in the audit work conducted by two Price Waterhouse (PwC) firms, reported The Economic Times.
These firms comprise Price Waterhouse Chartered Accountants and Price Waterhouse & Co Chartered Accountants.
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The regulatory body’s findings come from its 2024 audit quality inspections.
This included a review of remedial actions taken by the firms following previous reports and an examination of three audit engagements for the fiscal year ending 31 March 2023.
The NFRA’s inspection focused on areas of internal financial control over financial reporting concerning revenue, related party transactions, and impairment of non-financial assets.
These areas were scrutinised due to their higher risk of material misstatement.
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By GlobalDataIn an 11-page report, the NFRA noted that Price Waterhouse Chartered Accountants has committed to updating its independence policy to address issues highlighted in the previous inspection.
In the 2022 inspection report, the NFRA had advised Price Waterhouse Chartered Accountants to clarify its independence policy manual to prevent unintentional non-compliance with India’s statutory framework.
The latest report reveals deficiencies in the verification of related party transactions and arm’s length price testing in two engagement files reviewed in the current inspection cycle.
NFRA said in a report: “During the current inspection, the onsite review of compliance conducted on 19.09.2024, along with the emails exchanged with PWCA LLP, revealed that the independence policy manual did not incorporate any further changes as advised.
“PWCA LLP in response to the draft inspection report stated that they were updating their independence policy to ensure compliance with the statutory framework in India.”
Price Waterhouse Chartered Accountants and Price Waterhouse & Co are part of the domestic network Price Waterhouse & Affiliates.
This consists of 11 chartered accountant firms registered with the Institute of Chartered Accountants of India.
This network is also a member of the global network PricewaterhouseCoopers International.
Recently, PwC India announced leadership changes and the creation of new roles within the firm, set to take effect from 1 April 2025.
