The body censured Ashok B. Rajagiri and Sandeep P. Parikh and barred both from being an associated person of a registered public accounting firm. A third partner, Sundeep P. S. G. Nair was censured and was prohibited from serving as engagement partner or engagement quality reviewer for two years. Nair is required to complete 40 additional hours of continuing profession education related to audits of public companies. The firm can apply for reinstatement after two years and Parikh after three.
The PCAOB said it took the action because the audited of financial statements for MTNL, a telecommunications company, for 2008 through 2011 even though none of the personnel involved any experience with U.S. GAAP or with performing audits under PCAOB standards. The firm did not provide training to staff working on the audits or require employees to participate in CPE or professional development activities.
Rajagiri and the firm failed to perform any audit procedures on the 2006 and 2007 financial statements before issuing its 2008 audit report. Nevertheless, Rajagiri authorized issuance of an audit reporting for the 2008 statements that contained an unqualified opinion. For example, the PCAOB said even though Rajagiri and Nair believed it was necessary to confirm cash balances for the 2008 and 2009 audits, they did not do so and did not maintain control over cash confirmation requests for the company for 2011.
And even though the previous auditor had said in the 2007 audit that MTNL did not maintain effective controls over accounting for properties and equipment, Parikh & Associates did not test balances, including opening balances, or test whether the company had the rights to the property equipment or whether these were appropriately valued on the financial statements.Last modified on Sunday, 02 June 2013