Byju’s auditors negligent: Icai
Financial Reporting Review Board of Icai will review of conduct of auditors, role of the board, says president
The Institute of Chartered Accountants of India (Icai) has “found gross negligence on the part of the auditors” of the now-crippled edtech firm Byju’s, Icai president Ranjeet Kumar Agarwal said on Wednesday, adding that the accounting body is planning to also inspect the books of payments major Paytm.
“Our inspection has found gross negligence on accounting practices by individual auditors of Byju’s and accordingly we have recommended to the Financial Reporting Review Board (FRRB, a wing of Icai) to take punitive actions on auditors concerned,” Agarwal told PTI in Mumbai.
“The FRRB will review our report on the conduct of the auditors of Byju’s both individually as well as at the group level, apart from the role of the board of the company. After this threestage review, will form an opinion on the role of the individual auditors and take appropriate action. After that, the report will be made public,” he added.
International auditing major Deloitte had been the statutory auditor for Byju’s, but as the edtech firm’s financial troubles mounted, it resigned from the role in June 2023 citing a long delay in the preparation of the company’s financial statement for FY22.
Following Deloitte’s resignation,
Byju’s appointed BDO as its new auditor. BDO’s audit arm is MSKA & Associates.
The FRRB was constituted in July 2002. It may determine whether any scrutiny of a company’s books is necessary over allegations of regulatory lapses and their impact on the payment bank’s accounting, Agarwal said, and added that it is the discretion of the board whom to review and when to do so.
“In cases of gross negligence, which we have found in the case of Byju’s auditors, we will proceed with further investigation. If there are minor issues, we provide advisory guidance,” Agarwal said at a function organized by the Confederation of Indian Industry.
When asked whether the apex body for chartered accountants would inspect the books of the Paytm group now, he said, “As we have taken a suo moto decision to look into the role of the auditors of Byju’s, we are now thinking about looking to the role of the auditors of Paytm.”
The Reserve Bank of India (RBI) has barred Paytm Payments Bank from doing any business from 15 March following a slew of regulatory breaches by the payments firm.
On 31 January, the central had
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