NFRA Flags Lapses in MSKA & Associates' Audit Practices

The National Financial Reporting Authority (NFRA) has identified lapses in the audit practices of MSKA & Associates, highlighting issues in governance documentation, self-interest threat analysis, and audit work paper integrity. The firm has acknowledged the need for improvement and has begun corrective actions.

The National Financial Reporting Authority (NFRA) has raised concerns over the audit practices of MSKA & Associates following an audit quality inspection. The NFRA's report, spanning 27 pages, cited a lack of formal documentation regarding the firm's governance and management structure.

Additionally, the report highlighted deficiencies in MSKA & Associates' ability to demonstrate an analysis of self-review and self-interest threats as mandated by the Code of Ethics and the Companies Act prior to accepting non-audit services. Corrective measures have been initiated for the fiscal year 2023-24.

The firm's control over audit work paper documentation was also criticized, noting that their systems allowed for unauthorized modifications without proper sign-offs, compromising documentation integrity. The NFRA further observed inadequate fraud risk evaluation regarding provisions for doubtful loans during audits, leading to the call for significant improvements.

(With inputs from agencies.)