ICAI’S Wing To Soon Submit Its Report On BYJU’S Audit Process

SUMMARY

The Financial Reporting Review Board of the ICAI will soon submit its report on the auditing process of BYJU’S

The ICAI initiated the review of BYJU's financial statements for FY20 and FY21 in 2022 amid allegations of irregularities in accounting practices

The development comes at a time when BYJU’S is fighting on multiple fronts and its investors have called an EGM to reconstitute its board and change the leadership team

The Financial Reporting Review Board (FRRB) of the Institute of Chartered Accountants of India (ICAI) will soon submit its report on the auditing process of embattled edtech giant BYJU’S.

ICAI president Ranjeet Kumar Agarwal, who assumed office earlier this month, said during a recently held press briefing that the FRRB’s report is in its final stages. “FRRB is working on it. It is under process,” ET cited him as saying.

Agarwal also told the publication that the institute’s next course of action relating to the auditor in this case will be based on the report.

The FRRB is a wing of the ICAI that works to bring improvements in financial reporting practices. It reviews the financial statements of enterprises and the auditors’ report on them to determine the compliance with various norms.

The apex body of chartered accountants initiated the review of BYJU’s financial statements for FY20 and FY21 in 2022. Prior to that, Congress MP Karti Chidambaram had written to the ICAI calling for a review of the edtech giant’s financial statements.

It is pertinent to note that BYJU’S has faced flak from various quarters due to the long delays in releasing its financial statements. While the Byju Raveendran-led company released its financial statements for FY21 nearly 18 months after the end of the year, those for FY22 were released nearly two years after the end of the year. The company is yet to file its financial statements for FY23.

Its auditor Deloitte resigned in June last year citing the delay in filing the financial statements for FY22. Following this, BYJU’S appointed BDO (MSKA & Associates) as its statutory auditor.

The startup’s net loss zoomed 81% to INR 8,245.2 Cr in FY22, while operating revenue grew 120% year-on-year to INR 5,014.6 Cr.

At the end of FY22, BYJU’s had a lengthy list of dues to be recovered (nearly INR 3,800 Cr). The auditor also flagged concerns about the company’s ability to continue as a going concern.

BYJU’S has been fighting on multiple fronts over the past year or so. It has been plagued by a number of problems, including resignations of board members, layoffs, cash crunch, rising losses, and multiple insolvency petitions filed against it.

Amid all these, BYJU’S investors have called for an extraordinary general meeting on February 23 to reconstitute the edtech giant’s board and change its leadership team.