In A Tight Corner

The statutory auditors at the centre of the IL&FS loan default case - Deloitte Haskins & Sells LLP and BSR & Associates LLP - might have gotten themselves into a tight corner with government and regulatory sentiments strongly against them.

The auditors have been pleading 'innocence' saying that most of the transactions that led to the defaults were beyond the scope of statutory audits and those transactions could only be detected through forensic audits.

While Deloitte, which audited the books of two of IL&FS subsidiaries till 2017/18 , is saying that if there was anything suspicious in the books, the new auditors would have detected it, BSR & Associates is saying that transactions that led to this crisis were beyond the scope of statutory audits.

These explanations clearly are not finding favour with the Ministry of Corporate Affairs and its investigating arm. The MCA looks convinced that the two auditors failed to act on the anomalies in the books of the company despite signs of wrongdoings.