Price Waterhouse & Affiliates’ Network – Inspection Report No.132.2-2024-01 · 16 Mar 2026

[Image omitted. See the official document.]

राष्ट्रीय वित्तीय रिपोर्टिंग प्राधिकरण
National Financial Reporting Authority

INSPECTION REPORT

2024

Audit Firms:
Price Waterhouse Chartered Accountants LLP
Price Waterhouse & Co Chartered Accountants LLP
(PW&A Network)

Firm Registration No:
(FRN 012754N/N500016)
(FRN 304026E/E300009)

Inspection Report No.132.2-2024-01
16.03.2026

National Financial Reporting Authority,
$7^{\text{th}}$ Floor, Hindustan Times House,
18-20, K. G. Marg,
New Delhi 110001

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Contents

Executive Summary ................................................................................................................................1
Inspection Overview ...............................................................................................................................2
Audit Quality Inspection Approach ........................................................................................................2
Inspection Methodology .........................................................................................................................3
Audit Firms Profile .................................................................................................................................3
Acknowledgment ....................................................................................................................................4
Review of Firm-Wide Audit Quality Control System ............................................................................4

• a. Independence Policy and Practices ........................................................................................4
• b. Human Resources Policy and Practices .................................................................................4
  Review of Individual Audit Engagement Files Focusing on Selected Areas of Audit ...........................5
• (a) Investments ...........................................................................................................................5
• (b) Loans & Advances ...............................................................................................................6
• (c) Other areas ............................................................................................................................7
  • Going Concern .................................................................................................................7
  • Related Party Transactions ................................................................................................7
  • Audit Documentation ........................................................................................................8
  • Control Deficiency ..........................................................................................................8
    Chronology of Events .............................................................................................................................9
    Appendix A: Audit Firm’s response to this inspection report ..............................................................10

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M/s Price Waterhouse Chartered Accountants LLP and M/s Price Waterhouse & Co Chartered Accountants LLP

• • Inspection Report No. 132.2-2024-01, March 16, 2026

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PART A

Executive Summary

Section 132 of the Companies Act, 2013 (the Act) mandates the National Financial Reporting Authority (NFRA), inter alia, to monitor compliance with Auditing Standards, to oversee the quality of service of the profession associated with ensuring compliance with such standards, and to suggest measures required for improvement in quality of the service. Under this mandate, NFRA conducted audit quality inspections of the Chartered Accountant Firms M/s Price Waterhouse Chartered Accountants LLP (PWCA hereinafter) and M/s Price Waterhouse & Co Chartered Accountants LLP (PW& Co CA hereinafter) during the year 2025-26. The scope of this inspection included:

• a) a review of the remedial actions taken by the firms for the deficiencies reported in the previous report(s).
• b) a review of areas of quality control viz. Consultation, Monitoring and Human Resources.
• c) a review of the Financial Statements for the year ending 31.03.2024, in case of five (5) selected audit engagements. The review in these five cases focussed on three significant audit areas, out of which two areas viz., Revenue and Loans & Advances were common. The third focus area was engagement specific.

The inspection comprised of virtual discussions, onsite visits and also in person interactions. Onsite visit, involving review of quality control policies, procedures and examination of related documents were held from 10.11.2025 to 12.11.2025. During the onsite visit, the inspecting team held interactions with the leadership of the firms. This was followed by virtual discussions with the engagement teams of select audit engagements to facilitate a walkthrough of the audit files. These were followed by in person interactions with the respective engagement teams and other personnel of the firms. After examination of the audit files and interactions, the formal observations were conveyed to the audit firms. Upon receipt of response to such observations, a draft Inspection Report was issued to the Firms and on receipt of the firms’ response to the draft inspection report, an inspection report was issued to the Firms, for which a written response was received. The observations are summarised as follows:

• i. Independence in respect of six partners.
• ii. Matter relating to HR policy regarding recruitment.
• iii. Irregularities in audit procedures in investments held for sale and impairment assessment of investment not as per Ind AS 36¹.
• iv. Inadequate arm’s length assessment of loans given to subsidiaries as per SA 550².
• v. Non-compliance with the requirements of SA 570³.
• vi. Non-compliance with requirements of Ind AS 24⁴.
• vii. Post sign off modification.
• viii. Control deficiency over other expenses.

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M/s Price Waterhouse Chartered Accountants LLP and M/s Price Waterhouse & Co Chartered Accountants LLP

• • Inspection Report No. 132.2-2024-01, March 16, 2026

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Inspection Overview

1. Section 132 of the Act, inter alia, mandates NFRA, to monitor compliance with Auditing and Accounting Standards, to oversee the quality of service of the profession associated with ensuring compliance with such standards, and to suggest measures required for improvement in the quality of their services. The relevant provisions of NFRA Rules prescribe the procedures in this regard, which include evaluation of the sufficiency of the quality control system of Auditors and the manner of documentation of their work. Under this mandate, NFRA initiated audit quality inspections in August 2025. The overall objective of audit quality inspections is to evaluate the compliance of the audit firms/auditors with auditing standards and other regulatory and professional requirements, and the sufficiency and effectiveness of the quality control systems of the Audit Firm/Auditor, including:

• (a) adequacy of the governance framework and its functioning.
• (b) effectiveness of the firm’s internal control over audit quality; and
• (c) system of assessment and identification of audit risks and mitigating measures

2. This year's inspections involve a review of the remedial action taken by the firms in response to the previous inspection observations, and a test check of SQC-1 elements and select audit engagements for the financial year 2023-24 performed by the audit firms.

3. Inspections are intended to identify areas and opportunities for improvement in the audit firm’s system of quality control. Inspections are, however, not designed to review all aspects and identify all weaknesses in the governance framework or system of internal control or audit risk assessment framework; nor are they designed to provide an absolute assurance about the audit firm’s quality of audit work. In respect of selected audit engagements, inspections are not designed to identify all the weaknesses in the audit work performed by the auditors in the audit of the financial statements of the selected companies. Inspection reports are also not intended to be either a rating model or a marketing tool for audit firms.

Audit Quality Inspection Approach

4. Selection of audit firms for the 2024 inspections was based upon the extent of public interest involved, as evidenced by the size, composition and nature of the audit firms, the number of audit engagements completed in the year under review: complexity and diversity of preparer’s financial statements (henceforth, Companies) audited by the firms and other risk indicators. M/s Price Waterhouse Chartered Accountants LLP (PWCA), and M/s Price Waterhouse & Co Chartered Accountants LLP (PW& Co CA) were the audit firms selected using the above parameters.

5. The selection of individual audit engagements of the audit firms was based on financial and non-financial risk indicators identified by NFRA. Accordingly, the Audit Files in respect of five (5) Audit Engagements relating to the statutory audit of financial statements for the year ending 31.03.2024 were reviewed during the inspection.

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M/s Price Waterhouse Chartered Accountants LLP and M/s Price Waterhouse & Co Chartered Accountants LLP

• • Inspection Report No. 132.2-2024-01, March 16, 2026

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6. The scope of the inspection was as follows:

• a) Review of the remedial measures and improvements made in response to the previous inspection observations for firm-wide quality controls to evaluate the audit firms’s adherence to SQC-1[^5], Code of Ethics and the applicable laws and rules.
• b) Review of areas of quality control viz. Consultation, Monitoring and Human Resources.
• c) Review of individual Audit Engagement Files- A sample of five (5) individual audit engagement files pertaining to the annual statutory audit of financial statements for the year ending 31.03.2024 was selected. Three significant audit areas were identified, out of which two areas viz., Revenue and Loans & Advances were common across all the five (5) engagements, and a third area was engagement specific, based on the inherent risk of material misstatement.

Footnotes

1. Ind AS 36 Impairment of Assets ↩

2. SA 550, Related Parties ↩

3. SA 570 (Revised), Going Concern ↩

4. Ind AS 24 Related Party Disclosures ↩