Deloitte Haskins Sells and KPMG affiliate BSR & Associates are banned for five years, for failing in the audits of a unit of Infrastructure Leasing & Financial Services (IL&FS)
- The MCA has stated that these companies were negligent and have miserably failed to perform their audit duties
- The Serious Fraud Investigations Office has stated that a senior RBI official might have helped the company in bending rules.
- The new IL&FS board has conducted a forensic audit by Grant Thornton that a new third of the total outstanding loans by IFIN were either unsecured or had inadequate collateral.
- The government investigators have filed fraud charges against IFIN, its former management as well as the auditors.
Nowadays Auditors have come under close scrutiny in India, the prime example can be when capital market regulator barred all the Indian units of PwC, from auditing any listed companies for two years after a decade old accounting fraud case came in the picture.
The Enforcement Directorate (ED) has summoned senior executives of Deloitte Haskins and Sells (DHS) and BSR and Associates.
In a first, ED claws into auditors
This is the first time the ED, while scrutinizing a money laundering case has summoned auditors. Along with the firm’s officials, their audit partners, Udayan Sen, Kalpesh Mehta, and Sampath Ganesh are also being investigated.