The NFRA publishes the Audit Quality Review (AQR) Report of ITNL’s Statutory Audit for Fiscal Year 20217-18

The National Financial Reporting Authority (NFRA) has raised doubts over the ability of statutory auditor for undertaking engagement of IL&FS Transportation Network Limited (ITNL) for F.Y. 2017-18.

In AQR Report, the NFRA has not only questioned on the initial appointment of SRBC & Co LLP (concerned statutory auditor) but also its failure to monitor and enforce the compliance with Accounting Standards, Auditing Standards relevant to the performance of engagement. Though the NFRA has raised many concerns about the conduct of the engagement, the observations made in the AQR are limited to a few significant deficiencies and do not address all of the deficiencies that may have happened throughout the combat.

Some of the concerns raised by the authority are:-

1. The initial appointment as well as continuation of SRBC &Co LLP, as statutory auditor of ITNL, was prime facia illegal and void.

2. Because the audit firm has failed to obtain the sufficient and appropriate evidence to justify the valuation of ITNL’s investment and loans to its group entities, the ITNL’s financial exposure to its subsidiaries, associates, and joint ventures amounting to Rs. 3,346 crore was not properly valued as per the applicable Accounting Standards.

The Detailed Document Can Be Accessed Here