NSEL crisis: ICAI offers help for investigation
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National Spot Exchange Limited's (NSEL) books could face yet another round of audit as the disciplinary committee of Institute of Chartered Accountants of India (ICAI), which regulates close to 90,000 CA professionals, is open to initiating suo moto action to find out lapses on part of auditors.
Last week, ICAI wrote to the Forward Market Commission (FMC) offering its cooperation for the investigation into the NSEL fiasco jeopardising Rs 5,500 crore of 13,000 commodity investors and traders.
The move comes after FMC ordered NSEL promoters to appoint forensic auditor within seven days to recheck its accounts and stock positions in the warehouses.
FMC has expressed dissatisfaction over the information provided by NSEL and it wants exchange to reconcile the accounts and inventories to get clear picture about amount receivables and payable to its members.
NSEL's statutory auditor Mukesh P Shah told ET that his firm found exchange's accounts in order for the fiscal ended March 31, 2013. Last year, NSEL replaced its earlier audit firm SV Ghatalia & Associates, a member firm of Ernst & Young Global and introduced Mukesh Shah as auditor.
Ernst & Young spokesperson declined to comment on the issue while confirming that SV Ghatalia & Associates audited NSEL books before Mukesh Shah took over last year.
The NSEL payment crisis running into Rs 5,500 crore has brought into focus the role of auditors and may lead to yet another test for six and half decade old ICAI. In the past, it faced similar situations on account of negligence of chartered accountants of Satyam and Reebok.
Cautious ICAI is watching the developments related to NSEL closely.
"As on today, we have not received any complaints against NSEL auditors. However, we wrote to the FMC extending our cooperation in any matter relevant to our areas since NSEL issue demands multi disciplinary probe," said ICAI president Subodh Kumar Agrawal. (Economic Times)
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