Audit committees, independent directors should ask questions to auditors and CFOs: NFRA Chair

CA Dungar Chand U Jain | October 20, 2023 | Corporate / Company | No Comments

The audit committees and the independent directors should regularly communicate with auditors throughout the year and should not limit their role to reviewing the audit report only at the end of the audit, Ajay Bhushan Pandey tells ETCFO in an interview.

The Audit Committees and Independent Directors of the companies should ask questions to the auditors and the Chief Financial Officers who are the preparers of the financial statements to ensure a true and fair view of the accounts, stressed Ajay Bhushan Pandey, Chairperson, at India’s independent accounting watchdog, National Financial Reporting Authority (NFRA).

“Today we (regulators) are asking questions to auditors but these questions should actually have been asked by the members of the Audit Committee and Independent Directors to auditors and CFO ( preparers of the accounts) in the first place to ensure that the financial statements present a true and fair view,” Bhushan told ETCFO in an interview.

The NFRA Chairperson said that in the cases the regulator has dealt with so far it has found that auditors communicate only with manager-finance or general manager-finance or sometimes with CFOs and at the end, have one meeting with the Audit Committee or a 10-minute meeting with the Board or make a PPT presentation to them.

“This is the kind of interaction they are engaged with Those Charged With Governance (TCWG). However, this is not good enough for the effective two-way communication that is envisaged in the Standard on Auditing 260.

SA 260 lays down the responsibility of the auditor to “communicate” with TCWG.

TCWG, in the SA 260, is defined as a person or organisation with responsibility for overseeing the strategic direction of the entity and obligations related to the accountability of the entity. This includes overseeing the financial reporting process and may include the likes of the Audit Committee and the Independent Directors. For some entities, TCWG may include management personnel, etc which includes the CFO.

“They (the audit committees and the independent directors of the companies) should regularly communicate with auditors throughout the year and should not limit their role to reviewing the audit report only at the end of the audit. These steps will empower the auditors and aid them in finding financial misstatements or frauds. The quality of the audit will therefore improve, and the improved trust and confidence will inspire all stakeholders,” Pandey concluded.

The NFRA

In recent cases of fraud, mismanagement, and corporate failure, auditors have come under the radar for failing to live up to the auditing standards expected of them.

NFRA was constituted as an independent audit regulator on October 1, 2018, to improve public trust in financial markets. It was created on similar lines to the Public Company Accounting Oversight Board (PCAOB) in the US and the Financial Reporting Council (FRC) in the UK. Previously, the education body for CAs, the Institute of Chartered Accountants of India doubled up as the accounting regulator.

OYO appoints Rakesh Kumar as deputy CFO

Kumar joined OYO over 5 years ago as the Head of Financial Reporting.

Hospitality tech platform OYO has appointed Rakesh Kumar as deputy Chief Financial Officer (CFO), news agency PTI reported.

Previously, Kumar held the position of Head of Controls, overseeing controllership.

His transition to Deputy CFO signifies a significant expansion of his responsibilities, encompassing business finance and taxation, the company said. He joined OYO over 5 years ago as the Head of Financial Reporting.

In his enhanced role, Rakesh will be responsible for overseeing critical operational finance functions, including Treasury, Controllership, Shared Services, Business Finance, Taxation, Financial Planning & Analysis (FP&A) and execution of results, compliance, and timely audits across the organization. He will continue to report to OYO’s CFO Abhishek Gupta,” the PTI report stated.

India Inc’s most discussed CFO movements in September 2023

While the month of September has seen many major corporate crossings, the one which made the biggest headlines and got most discussed in ‘CFO world’ was the resignation of finance veteran Jatin Dalal as Chief Financial Officer (CFO) of IT major Wipro. This resignation shook the industry as Dalal was associated with Wipro for 21 years and was holding the position of CFO since 2015.

Aparna Iyer succeeded Jatin Dalal as CFO of Wipro, later the news came that Dalal will now be the CFO of IT services company Cognizant.

Other top CFO movements included appointment of Saurabh Taneja as CFO of Mahindra Logistics, Bharti AXA Life Insurance made appointment of Rikhil Shah as CFO and resignation of Aakash Moondhra as CFO of PayU Global.

Here are some of the major CFO appointment that made into headlines in September 2023

1. Wipro CFO Aparna Iyer: Indian IT services provider Wipro appointed Aparna Iyer its CFO, effective September 22. She possesses over 20 years experience with Wipro, she has held several finance roles, including Internal Audit, Business Finance, Financial Planning and Analysis, Corporate Treasury and Investor Relations.

2. Mahindra Logistics CFO Saurabh Taneja: Mahindra Logistics has appointed Saurabh Taneja as the company’s CFO. He replaced Yogesh Patel. Saurabh, a Chartered Accountant possesses 21 years of work experience with 100 companies and Big 4 Consulting Firm. Previously, he was managing the role of CFO – Designate with TATA Boeing Aerospace Limited.

3. Bharti AXA Life Insurance CFO Rikhil Shah: Bharti AXA Life Insurance appointed Rikhil Shah as its CFO. Prior to joining the company, he served as the Vice President-Finance and later as CFO at SBI General Insurance. He has been associated with companies like HDFC Ergo Insurance, Phillips Carbon Black, and Oxford Laboratories.

4. HMD Global CFO Tanuj Patro: HMD Global, the maker of Nokia-branded smartphones, has appointed Tanuj Patro as CFO for India & Asia Pacific markets.
Patro, a Chartered Accountant possesses over two decades in the finance domain. He has worked with companies like Microsoft, Nokia, LG, and E&Y, as well as emerging market pioneers like Paytm.

5. ReNew CFO Kailash Vaswani: Clean energy firm ReNew has appointed Kailash Vaswani as its CFO. The appointment is effective from October 30, 2023. He currently is President, Corporate Finance at ReNew, previously he served as an interim CFO and is one of the founding team members of the company.

Other major CFO appointments in September include Uber CFO Mahendra-Rajah, Mashreq CFO Norman Tambach, CtrlS Datacenters CFO Mohit Pande, VideoVerse CFO Hemant Agarwal and Mrs Bectors Food CFO Arnav Jain.

Some of the major CFO resignation in September 2023

1. Jatin Dalal resignation as Wipro CFO: Finance veteran Jatin Dalal was associated with Wipro for 21 years and was holding the position of CFO since 2015 resigned with effect from November 30. Later the news came that he will join IT services company Cognizant as CFO from December 2023.

2. Aakash Moondhra resignation as PayU Global CFO: Aakash Moondhra, the global CFO of online payment services firm PayU Global has resigned, effective September 30, 2023.

Moondhra was part of PayU for the last 8 years. In a career spanning over 28 years,he has worked with companies including AT&T, Baring Private Equity, Bharti Group and Snapdeal in various capacities.

Navneet Munot elected as Chairman of AMFI

The Board of AMFI also elected Mr. Anthony Heredia, MD and CEO, Mahindra Manulife Mutual Fund as the Vice-Chairman of AMFI. Mr. Anthony Heredia is a Chartered Accountant and has over 26 years of experience in the investment management industry.

Naveet Munto, MD and CEO of HDFC Asset Management, has been elected as the Chairman of Association of Mutual Funds in India (AMFI).

Navneet Munot is a Chartered Accountant and a CFA charter holder and has over three decades of experience in financial services.

“I am hugely excited about the opportunities that lie ahead for the industry. I look forward to collaborating with my industry colleagues and working under the guidance of our regulator SEBI to propel the mutual fund industry to even greater heights. Together, we’ll strive to enhance the financial well-being of our investors and bring greater prosperity to our nation. For AMFI as an organization, I look forward to continuing the strong legacy and building on the AMFI 2.0 strategy that has been outlined to strengthen AMFI,” said Munot.

Heredia stated, “It’s an exciting opportunity to contribute to the growth and development of the mutual fund industry in India. I am eager to work collaboratively with our industry partners and stakeholders to chart a path towards achieving the ambitious goal of managing 100 trillion AUM.”

The new Chairman and Vice Chairman will take charge from October 16, 2023.

AMFI was incorporated on August 22, 1995, as a non-profit organisation. As of now, all the 44 asset management companies that are registered with SEBI, are its members. The Association of Mutual Funds in India (AMFI) is dedicated to developing the Indian Mutual Fund Industry on professional, healthy and ethical lines and to enhance and maintain standards in all areas with a view to protecting and promoting the interests of mutual funds and their unit holders. AMFI, the association of SEBI registered mutual funds in India of all the registered Asset Management Companies, was incorporated on August 22, 1995, as a non-profit organisation.

Indian Oil appoints Anuj Jain as director (finance)

Simultaneously, with the appointment of Jain as director (finance), Sanjay Kaushal has ceased to serve as CFO of the Company.

The government has appointed Anuj Jain as director (finance) at Indian Oil Corporation, effective October 09.

According to an order issued from the Department of Personnel & Training (DoPT), he has been appointed to the post for a period of five years.

Simultaneously, with the appointment of Anuj, Sanjay Kaushal has ceased to serve as the Chief Financial Officer (CFO) of the Company, effective from the same date.

Before taking over this role, Anuj was working as chief general manager (finance) at the company’s refineries headquarters in Delhi. He has previously worked as the CFO of Indian Oil’s Sri Lanka subsidiary.

Anuj is a chartered accountant and has spent over 27 years at Indian Oil, working in diverse areas such as corporate finance, treasury and fund management, supply chain optimization, pricing, shipping, and taxation.

Biocon Biologics appoints Kedar Upadhye as CFO

Upadhye replaces MB Chinappa who will take up a finance role at the Biocon Group.

Biocon Biologics Ltd, a subsidiary of Biocon Ltd has appointed Kedar Upadhye as Chief Financial Officer (CFO), effective October 31.

Upadhye will succeed MB Chinappa, who is promoted to take on a strategic finance role at Biocon Group.

MB Chinappa has served as CFO of Biocon Biologics since his appointment in January 2020 and has played an integral role in developing business strategy and enabling profitable growth, the Bengaluru-based company said in a press statement.

Upadhye Joined Biocon Biologics from ReNew Energy where he was the CFO. Prior to that , he was the Global CFO at Cipla.

He possesses over 23 years of experience in senior global leadership roles spanning Corporate Finance, Strategy, Accounting, FP&A, Business Finance, Governance and Investor Relations at leading Pharma, Energy and FMCG players such as Cipla, Dr. Reddy’s, PepsiCo, and Thermax.