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More than 1,000 statutory auditors, representing a large section of audit professionals, have not filed annual returns, according to the National Financial Reporting Authority (NFRA), India’s audit regulator.

Painting a grim picture of India’s audit landscape, NFRA disclosed the names of 1,011 auditors, including sole proprietorship firms, which have not filed NFRA-2 forms for the 2018-19 reporting period.

Audit firms are required to file NFRA-2 form every year, with details on their registration and permanent account number, partners, number of employees and payments. The auditor has to disclose if it quit an audit assignment of a firm in the previous three years, or withdrew an audit report on financial statements, or its consent on using its name in a report. The auditor is also required to make a statement on its quality control policies for the reporting period.

Audit experts said these are significant disclosures that an auditor is mandated to file. “The absence of such information will even come in the way of policy formulation," said Vijay Kapur, a former director of the Institute of Chartered Accountants of India (ICAI).

The lax compliance culture comes to the fore when the authorities are trying to help audit professionals grow and diversify the audit market.

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