The ICAI has forwarded the matter of Byju to its disciplinary committee
The Institute of Chartered Accountants of India (ICAI) sent the subject concerning ed-tech firm Byju’s to its disciplinary committee for further action. The ICAI’s Financial Reporting Review Board (FRRB) was looking into Byju’s financial reports. The FRRB has raised some issues, which the disciplinary committee will look into. It is understood that the disciplinary committee will look into three or four areas of concern.
Under ICAI, the FRRB has the ability to analyse general-purpose financial statements and auditor’s reports of firms. In Byju’s case, the FRRB scrutinised the company’s balance sheet, profit-and-loss account statement, notes on the account, and auditor’s report.
If the disciplinary committee deems the auditor guilty of professional misconduct, it has the authority to impose a maximum penalty of Rs. 5 lahk as well as debar the auditor. The ICAI can only take action against the auditor, not the audit firm, under the current Chartered Accountants Act.
Deloitte Haskins & Sells had resigned as the statutory auditor of Byju’s. Deloitte cited the company’s extended delay in providing audited financial accounts for the fiscal year ending March 31, 2022, as the cause for its resignation. Following these developments, the firm stated that BDO has been appointed as its statutory auditor for the next five years. On July 13, it also announced the formation of an advisory committee. Rajnish Kumar, former Chief Executive Officer of the State Bank of India and current chairman of BharatPe, and Mohandas Pai, former Chief Financial Officer of Infosys, have joined Byju’s board advisory council.