The National Financial Reporting Authority (NFRA) conducted a thorough audit quality inspection, uncovering lapses in the auditing practices of Walker Chandiok & Co LLP. The scrutiny, initiated in December last year, delved into multiple dimensions, evaluating firm-wide quality controls and auditing documentation for the financial year ending March 31, 2021.
NFRA noted a discrepancy in the disclosures made by Walker Chandiok & Co LLP (WCCL) and Grant Thornton Bharat LLP (GTBL) to the US audit regulator concerning ‘audit-related memberships, affiliations, or similar arrangements.’ The audit firm failed to furnish details of Grant Thornton International Ltd (GTIL) network entities during the inspection, impeding an assessment of compliance with independence-related requirements.
One significant observation pertains to the deficiencies in engagement quality control reviews conducted by WCCL’s partners. Documentation lapses and non-conformity with the firm’s quality control policies, as well as SQC 1 and Standards on Auditing (SA) 220, were evident.
The regulator flagged several shortcomings where the audit firm deviated from prescribed ‘client acceptance and continuance’ prerequisites. This includes lapses in verifying client integrity and inadequacies in recording the resolution of concerns.
NFRA’s findings shed light on critical areas requiring attention within Walker Chandiok & Co LLP’s auditing activities.