Putting stringent norms for compliance professionals, Rule 9 of the Companies (Audit and Auditors) Rules, 2014 has now been omitted from the Companies Act 2013 inconsequent to which, audit firms can be punished for an offence done by one of its partner who acted in a fraudulent manner or abetted or colluded in any fraud.
As per the Notification issued by the Ministry of Corporate Affairs ( MCA )on 7th May 2018, the entire audit firm, either jointly or severally, along with the partner concerned, will now have to pay up for the penalties arising under the company law for any fraudulent act of an audit partner.
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