PENALTY ON STATUTORY AUDITOR FOR NON-DISCLOSURE OF RELATED PARTY TRANSACTIONS & MSME INTEREST DUES

 PENALTY ON STATUTORY AUDITOR FOR NON-

DISCLOSURE OF RELATED PARTY

 TRANSACTIONS & MSME INTEREST DUES

ROC Bangalore penalizes Statutory Auditor – Deloitte Haskins & Sells in the matter of Stanly OEM Sofas Limited

FACTS OF THE CASE

Non-disclosure of MSME interest details by statutory auditors is a serious issue leading to penalties for both the company and the auditor, as it violates the requirements of the MSMED Act, 2006 and the Companies Act, 2013.

Auditors are responsible for reporting the company's non-compliance, including details on unpaid amounts, delayed interest, and interest accrued but unpaid to MSME suppliers.

 Recent changes also require disclosure of all MSME payments, not just delayed ones, in Form 3CD of the tax audit report under Section 43B(h).

MSMED ACT, 2006:

Buyers of goods and services from MSMEs must disclose the status of payments to MSMEs in their annual accounts. This includes unpaid amounts, interest paid, and interest accrued but unpaid.

RELATED PARTY TRANSACTIONS NOT REPORTED

·      Non-disclosure of related entities as required under AS-18

 

·      Related party transactions carried out without proper Board approval.

 

ROC,BENGALURU LEVIES FINE ON PARTNER AT DELOITTE HASKINS & SELLS,

The Registrar of Companies, Karnataka, has imposed a penalty of ₹30,000 on Monisha Parikh, Partner at Deloitte Haskins & Sells, for failing to report critical non-compliances under Section 143 of the Companies Act, 2013 (Order dated 28.04.2025).

KEY TAKEAWAYS

Despite these significant irregularities, the statutory audit report contained no adverse remarks or qualifications.

This action underscores the increasing regulatory emphasis on auditor accountability, reporting diligence, and transparency in corporate disclosure.

Auditors must ensure accurate statutory disclosures to avoid penalties and legal consequences.

R V SEKAR FCS,LLB, 79047 19295