Current Affairs · NFRA Audit Inspection Findings

An analysis of recent regulatory inspections highlights significant deficiencies in the audit work of major accounting network firms. Based on the findings of the National Financial Reporting Authority (NFRA) regarding Price Waterhouse Chartered Accountants LLP, which of the following statements is/are correct? 1. The regulatory inspection revealed that related-party transactions (RPTs) were classified as arm's length despite insufficient supporting documentation, and price comparisons compromised audit reliability by omitting records of specific goods and services. 2. Among the specific areas of audit lapses identified, the firms were cited for conducting excessive independent chartered accountant reviews which inadvertently led to non-compliance with board meeting rules. 3. The NFRA maintained that qualitative aspects such as terms of conditions, guarantees, and bad debts were inadequately considered during audit processes. Select the correct option: