The National Financial Reporting Authority (NFRA) has highlighted significant shortcomings in the audit practices of BSR & Co LLP, a KPMG sub-licensee, particularly in related party transactions. The audit regulator's inspection was conducted in August 2024, which reviewed three BSR audit engagements from the FY ending March 2022 and March 2023. In a 13-page inspection report, NFRA found lapses related to auditing standards and compliance with the Companies Act 2013. Among the critical observations were deficiencies in verifying related party transactions. The inspection report also revealed a complex series of transactions initiated by an unnamed company, involving its promoter entity. NFRA noted that the company raised Rs 550 crore through non-convertible debentures (NCDs) and invested Rs 650 crore in compulsorily convertible preference shares (CCPS) of the promoter entity. This transaction was reportedly used to facilitate debt repayment by the promoter entity. NFRA also ...