NFRA finds big gaps in statutory audit of IL&FS Transportation Networks
The National Financial Reporting Authority (NFRA) has found that the initial appointment of the audit firm and its continuation as a statutory auditor of IL&FS Transportation Networks (ITNL) was prima facie illegal and void and that the company’s losses were understated.
The statutory auditor for ITNL for 2017-18 (FY18) was S. R. Batliboi (SRBC & Co LLP) & Co.
LLP, which uses the EY brand and trademark for obtaining and providing audit services and is an independent member firm of Ernst & Young Global.
In its audit quality review report, the NFRA has said that ITNL’s financial exposure to its subsidiaries, associates, and joint ventures – amounting to Rs 3,346 crore – was not properly valued according to the applicable accounting standards.
