ICAI accuses 3 top audit firms of professional misconduct for IL&FS crisis

The statutory auditors of Infrastructure Leasing and Financial Services (IL&FS) Ltd – the parent company of debt-laden IL&FS Group - and two of its subsidiaries, IL&FS Transportation Networks Ltd (ITNL) and IL&FS Financial Services Ltd (IFIN), have been held “prima facie guilty” of professional misconduct by the Institute of Chartered Accountants of India (ICAI), The Hindu Business Line has reported.

The names listed by the ICAI include three top-notch audit firms - Deloitte Haskins & Sells, BSR & Associates LLP and SR Batliboi.

The decision has cleared the way for full-fledged investigations against the partners of these audit firms.

The ICAI, in a written reply to the publication, confirmed that the statutory auditors of IL&FS Ltd, ITNL and IFIN have been held prima facie guilty of professional misconduct for the financial years 2016-17 and 2017-18.

SR Batliboi was the statutory auditor of IL&FS Ltd for 2017-18, whereas Deloitte Haskins & Sells was the firm's auditor in 2016-17.

For ITNL, the statutory auditor for 2017-18 was SR Batliboi. A joint audit was conducted by SR Batliboi and Deloitte Haskins & Sells for 2016-17.

In IFIN’s case, there was a joint audit by Deloitte Haskins & Sells and BSR & Co for 2017-18. In 2017-18, Deloitte Haskins & Sells was the statutory auditor of IFIN.

The ICAI has already sent a formal communication to the partners of the three audit firms, the report said. #casansaar (Source - The Hindu Business, MoneyControl)