GST UPDATE

Big breaking! Byju’s auditor Deloitte RESIGNS!

???? This comes at a time when 3 KEY-BOARD MEMBERS have also dropped their resignations due to differences with Byju Raveendran on key operational issues. 

???? Earlier this month, Byju's laid off around 1500-2000 employees, defaulted on loan repayment and sued the lender. 

Byju seems to be in deep deep trouble! 

? This is what Deloitte said in a statement!

1] The financial statements of the Company for the year ended March 31, 2022, are long delayed. We have also not received any communication on the resolution of the audit report modifications in respect of the year ended March 31, 2021, and the status of audit readiness of the financial statements and the underlying books and records for the year ended March 31, 2022 and we have not been able to commence the audit as on date

2] As a result, there will be a significant impact on our ability to plan, design, perform, and complete the audit in accordance with the applicable auditing standards. In view of the aforesaid, we are tendering our resignation as statutory auditors of the Company with immediate effect

Further to this, Byju’s has appointed BDO (MSKA & Associates) as Deloitte’e replacement for the next five years as the Stat auditor of the consolidated group. 

? What does this mean

1] This creates serious concerns about the quality of financial statements and information produced by Byju and increases the risk for auditors as getting no responses or resolution on the key audit matters and issue pointers definitely raises a lot of red flags about the operations. 

2] Resigning as an Auditor of an entity is the last resort for Audit Firms because a lot of questions are asked and tons of compliance will fall upon both parties. If Deloitte has opted for resignation, there would have been more than just the statement quoted above. There would be several client meetings, internal discussions, and analyses.

3] And this resignation comes at a time when big revelations and troubles like Loan default, layoffs, key board member resignation, and issues in the shareholding pattern are not stopping for Byju.

Do you think there is more to this story and the troubles will increase from this point?

Let us know in the comments!

Regards

CA. Praveen Sharma