ICAI finds IL&FS Auditors ‘Prima facie Guilty’ of Professional Misconduct

The Institute of Chartered Accountants of India ( ICAI ) has reportedly found the statutory auditors of Infrastructure Leasing and Financial Services (IL&FS) Ltd “prima facie guilty” of professional misconduct, The Hindu Business Line reported. 

IL&FS Ltd is 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). The names reportedly 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. It was reported 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. R 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.