AUDIT CASE STUDY
SEBI-NFRA connection Audit Fraud.
NFRA penalizes KPMG & it's Partners.
Consequently, SEBI suspends CEO of Embassy Trust (the erstwhile penalized Partner of KPMG).
SEBI ordered Embassy REIT to suspend it's CEO Aravind Maiya, a Chartered Accountant, who was earlier a KPMG partner.
Aravind Maiya (KPMG partner) was an auditor for Coffee Day Enterprises Ltd. (CDEL), the parent company behind Café Coffee Day.
There was humongous financial scam in CCD involving ₹ 3500 crores. The financial scam was completely neglected by the Auditor and the Audit Quality was very poor.
As SEBI’s investigation went on, the National Financial Reporting Authority (NFRA) also got involved to look into the auditors' role in the scam.
According to NFRA, the audit team, led by Maiya, barely looked into highly suspicious transactions. NFRA said this showed a severe lack of professional scepticism from the auditors.
In short, NFRA found that the auditors, instead of verifying key documents or questioning what they saw in bank statements, they seemed to rely heavily on the management’s word.
In August 2024, NFRA slapped KPMG with a ₹ 10 crore fine, Maiya ₹ 50 lakhs, and banned him from audits for 10 years. Another senior auditor involved, Amit Somani, was fined ₹ 25 lakhs and banned for 5 years.
With NFRA’s order in hand, SEBI began to question whether Maiya was still fit to serve as the CEO of Embassy REIT, one of India’s largest real estate investment trusts. SEBI’s concern came from the “fit and proper person” criteria.
So when SEBI looked back at Maiya’s track record, especially his failure to catch red flags at Coffee Day, it saw a clear issue. For SEBI, those missed warning signs meant Maiya didn’t meet the ‘fit and proper person’ standard that’s essential for handling public funds.
SEBI’s swift action sends a strong message — public trust is paramount, and even a single, serious lapse can end a career.
CA SIDDHARTH AGARWAL
SEBI-NFRA connection Audit Fraud.
NFRA penalizes KPMG & it's Partners.
Consequently, SEBI suspends CEO of Embassy Trust (the erstwhile penalized Partner of KPMG).
SEBI ordered Embassy REIT to suspend it's CEO Aravind Maiya, a Chartered Accountant, who was earlier a KPMG partner.
Aravind Maiya (KPMG partner) was an auditor for Coffee Day Enterprises Ltd. (CDEL), the parent company behind Café Coffee Day.
There was humongous financial scam in CCD involving ₹ 3500 crores. The financial scam was completely neglected by the Auditor and the Audit Quality was very poor.
As SEBI’s investigation went on, the National Financial Reporting Authority (NFRA) also got involved to look into the auditors' role in the scam.
According to NFRA, the audit team, led by Maiya, barely looked into highly suspicious transactions. NFRA said this showed a severe lack of professional scepticism from the auditors.
In short, NFRA found that the auditors, instead of verifying key documents or questioning what they saw in bank statements, they seemed to rely heavily on the management’s word.
In August 2024, NFRA slapped KPMG with a ₹ 10 crore fine, Maiya ₹ 50 lakhs, and banned him from audits for 10 years. Another senior auditor involved, Amit Somani, was fined ₹ 25 lakhs and banned for 5 years.
With NFRA’s order in hand, SEBI began to question whether Maiya was still fit to serve as the CEO of Embassy REIT, one of India’s largest real estate investment trusts. SEBI’s concern came from the “fit and proper person” criteria.
So when SEBI looked back at Maiya’s track record, especially his failure to catch red flags at Coffee Day, it saw a clear issue. For SEBI, those missed warning signs meant Maiya didn’t meet the ‘fit and proper person’ standard that’s essential for handling public funds.
SEBI’s swift action sends a strong message — public trust is paramount, and even a single, serious lapse can end a career.
CA SIDDHARTH AGARWAL
CA-CMA Inter Law Marathon: https://www.youtube.com/playlist?list=PLbj7DZtXIi7FxbkM7sWApuz_56cyftW7t
CA Inter Audit Marathon: https://www.youtube.com/playlist?list=PLbj7DZtXIi7EDT1zApXQxqZFACy97O6im
CA Inter SM Marathon: https://www.youtube.com/playlist?list=PLbj7DZtXIi7GP41qxoBXhLKQ2YNUHe7GT
CA Final Audit Marathon: https://www.youtube.com/playlist?list=PLbj7DZtXIi7FwBK7ZoioOt9Ayu7FaA8-J
In next few months, I will launch new Courses in Law-Audit to support all students:-
1. Tests.
2. Writing Practise
3. Summary Book
4. Exam Oriented Batch
5. Separate CMA Law-Audit
SIDDHARTH SIR
1. Tests.
2. Writing Practise
3. Summary Book
4. Exam Oriented Batch
5. Separate CMA Law-Audit
SIDDHARTH SIR
Writing Practise - Questions - LAW.pdf
7.1 MB
Writing Practise - Questions - LAW.pdf
Writing Practise - Answer Set 1.pdf
5.7 MB
Writing Practise - Answer Set 1.pdf
2. CA Inter Audit Test 17-Nov-2024_GD-1.pdf
8.8 MB
2. CA Inter Audit Test 17-Nov-2024_GD.pdf
This is a very good MCQ paper - it will teach you the science behind MCQ options that will test your Intelligence.
Purpose of test today is to get 40/50 mcqs right.
Instead of rushing through the paper, read every *option* and the *story* to see how ICAI sets mcq.
Test time starts at 2.15 pm. Reading time 15 mins. Then attempt between 2.30 to 5.30 pm.
Try to be accurate. 👍 Of you get 80+ marks, you get a 🫡 from me.
SIDDHARTH SIR
Purpose of test today is to get 40/50 mcqs right.
Instead of rushing through the paper, read every *option* and the *story* to see how ICAI sets mcq.
Test time starts at 2.15 pm. Reading time 15 mins. Then attempt between 2.30 to 5.30 pm.
Try to be accurate. 👍 Of you get 80+ marks, you get a 🫡 from me.
SIDDHARTH SIR
CA Inter Audit Test-1 (Answer Key). Dear All, If you have scored 80+, you get a 🫡 from me. Because many questions in this are weird and 2 questions are out of the world based on earlier syllabus. I will make a SOLUTION Video tomorrow and share it. Till that time, evaluate your paper and check how much you scored.
SIDDHARTH SIR
SIDDHARTH SIR
1B. CA Inter Audit Test 17-Nov-2024 - SOLUTION.pdf
116.6 KB
Document from Siddharth Agarwal