The statutory auditor for Multi Commodity Exchange,Deloitte is likely to face heat for the audit conducted for the Exchange for past years as Forward Markets Commission has directed MCX to review the audit done by Deloitte, said the source.

MCX has been asked to ascertain by the regulator whether there were discrepancies at the commodity exchange that could have been observed and reported by Deloitte.  

Deloitte was appointed by MCX as the statutory auditor after it went public in 2012.

PricewaterhouseCoopers, after receiving the mandate fromFMC to conduct forensic audits on MCX. The forensic audit conducted by PWC at MCX highlighted and raised severe questionsoperations, surveillance etc of the exchange. This was also when the Dellotte was the statutory auditor of the exchange.  FMC in it's directions to MCX has stated that Deloitte would have seen some traces of violations of FCRAlaw that should have been detected and reported by Deloitte.  

An official source said, “Deloitte may have not been fully aware, but may have had some idea of the discrepancies at the exchange.”

However, Deloitte earlier said that the work of a statutory auditor is to check for the related party transactions and whether they have been cleared by the board.

FMC had recently informally suggested to MCX to drop Deloitte as a statutory auditor after the findings of the PWC forensic audit report.

Earlier, Deloitte had defended its audit work at MCX, saying the Companies Act and the Securities Exchange Board of India (Sebi)’s corporate governance norms didn’t mandate it to go beyond basic examination of the book of accounts.Deloitte had claimed,“As a statutory auditor, the scope of our work at MCX was to ensure the management made a full disclosure of related-party transactions and whether these were cleared by the board or not. As a forensic auditor, PwC had a wider scope to investigate the entities with which MCX had trade relations.”

FMC has also initiated an internal review of the audit which has was done by the regulator at other commodity exchanges including NCDEX, ACE, NMCE and UCX. (Business Standard)