ICAI Says Probe Into Alleged Audit Lapses At BYJU'S Still Ongoing

SUMMARY

ICAI president Ranjeet Kumar Agarwal has revealed that the institute’s disciplinary committee is still checking for alleged auditing lapses at edtech giant BYJU’S

BYJU'S tryst with the apex CA body dates back to 2022 when the latter started investigating its improper financial disclosures in November

Justifying the delay in concluding the probe, Agarwal said that the institute's investigation into BYJU’S comprises multiple stages

Institute of Chartered Accountants of India (ICAI) president Ranjeet Kumar Agarwal has revealed that the institute’s disciplinary committee is still checking for alleged auditing lapses at edtech giant BYJU’S, more than two years after the ICAI began the investigation.

Justifying the delay in concluding the probe, Agarwal said that the institute’s investigation into BYJU’S comprises multiple stages. The probe relates to alleged audit lapses in BYJU’S between FY21 and FY22.

The matter is currently being investigated by ICAI’s disciplinary committee, the president told reporters at a press briefing in Delhi. “The disciplinary committee can accept or reject the prima facie opinion of the directorate. They are currently looking into this matter,” Business Standard quoted him saying.

BYJU’S tryst with the apex CA body dates back to 2022 when the latter started investigating its improper financial disclosures in November. Consequently, the ICAI referred the matter to its Financial Reporting Review Board (FRRB) in February 2023.

A year later, the board was on track to submit its report on the auditing process of embattled edtech giant. “FRRB is working on it. It is under process,” Agarwal said in February 2024.

Agarwal then said that the body has found gross negligence in BYJU’S auditing processes. “Our inspection has found gross negligence on accounting practices by individual auditors of BYJU’s and accordingly we have recommended to the financial reporting review board (FRRB) to take punitive actions on auditors concerned,” he said in March.

In its last financial disclosure, BYJU’S consolidated net loss surged 81% to INR 8,245.2 Cr in fiscal year 2021-22 (FY22) from INR 4,564.3 Cr in FY21. This staggering loss of close to $1 Bn meant that BYJU’S was worse off than many believed.

As reported by Inc42 earlier this year, BYJU’S revenue for FY23 touched the INR 6,500 Cr mark, however, the company’s net loss for the past two fiscals is not clear.

While the ICAI continues its extensive investigation on the financials of BYJU’S, the past year has seen it sink to deeper waters legally and monetarily. For the startup, the year 2024 has included grave corporate governance crises and cases in the Supreme Court, the NCLT, NCLAT, ED, among other agencies.