ICAI’s disciplinary panel probing auditing lapses in Byju’s case

ICAI President Ranjeet Kumar Agarwal said the ICAI's Disciplinary Directorate has submitted its report. Based on this, the committee will take punitive action against the CAs found guilty.

New Delhi: A disciplinary committee of the Institute of Chartered Accountants of India (ICAI) is examining the negligence of chartered accountants in alleged auditing lapses regarding the embattled edtech firm Byju’s, ICAI President Ranjeet Kumar Agarwal said on Monday.

He said the Disciplinary Directorate of the ICAI has submitted its report and based on this the committee would take punitive action against the CAs found guilty.

“The Financial Reporting Review Board (FRRB) took suo-moto action. Then it went to the disciplinary directorate and now the issue is with the disciplinary committee,” Agarwal told reporters.

Asked about the possible lapses Agarwal said, “You should understand since there were some issues that’s why FRRB referred to the DC (disciplinary committee). If there had not been any issue, then why would FRRB have referred to the DC.”

ICAI Vice President Charanjot Singh Nanda, who heads the disciplinary committee examining Byju's case, said things would take time as it is a quasi-judicial process. “It is a court. Evidence will come. Hearing will happen,” Nanda said when asked about the timeline for the committee’s decision.

Once a symbol of India’s startup success, Byju Raveendran founded edtech firm Byju’s, is now facing a crisis with financial troubles and a number of litigations by lenders and investors in India and abroad.

The company, which was valued at around $22 billion in 2022, is now worth zero, Raveendran said in October. Byju’s auditors have resigned twice in less than two years citing concerns over financial and governance issues.

In 2023, Deloitte resigned as the auditor of Byju's citing delays in audit modification and release of financial statements. Then the company appointed BDO (MSKA & Associates) as statutory auditors, which quit in September this year, alleging delays in financial reporting, lack of support from management, and concerns over recovering outstanding dues from a Dubai-based entity.

When asked whether the ICAI disciplinary committee would take action against audit firms, Agarwal said, “Our mandate is CAs. The committee investigates all the people, appearances are there, personal appearances happen, papers are called.”

According to Agarwal, the ICAI disciplinary committee has awarded punishment in 211 cases till December 19 in the current financial year against 119 in the previous year. In the same period, the committee has taken up 262 cases against 336 cases in 2023-24.

ICAI to have 11 centres of excellence in 3 years

The Institute of Chartered Accountants of India (ICAI) plans to open 9 new centres of excellence in the next three years including in Bengaluru, Kolkata and Gurugram ICAI President Ranjeet Kumar Agarwal said on Monday.

At present ICAI has two centres of excellence one each in Hyderabad and Jaipur. The third centre of excellence will be opened in Kolkata in January 2025 Agarwal told reporters.

He said the Centres would be focused on fostering research innovation and skill development. He said the ICAI would organise the World Forum of Accountants (WOFA) in January 2025 that would aim to position India as a global accounting and auditing hub.

The event to be organised from January 31 to February 2 in the national capital is expected to bring together over 10000 accounting and finance professionals from across the globe to discuss the latest trends challenges and opportunities in the field.