The prominent educational technology firm, Byju’s, is currently under investigation by the Institute of Chartered Accountants of India (ICAI). The ICAI has forwarded the matter to its Disciplinary Committee for examination. The Financial Reporting Review Board (FRRB) of the ICAI has assessed the financial disclosures of Byju’s.
As per a member of the Financial Reporting Review Board (FRRB), there is a necessity for an extensive inquiry into the financial disclosures. If the auditor is found to have engaged in professional misconduct, they could be liable for a maximum penalty of Rs. five lakh and may be disqualified by the disciplinary committee.
The ICAI has scrutinised the financial disclosures of Byju’s due to the 22-month delay in financial reports and based on the same the central government ordered the examination of the financial records of the prominent Edutech company, Byju’s. The company is facing significant financial and managerial challenges.
Recently, the auditors of the company resigned, followed by the departure of three board members. Deloitte Haskins & Sell, one of the largest auditing firms, has stepped down from major Edutech Company Byju’s – Think and Learn Private Limited. On 22nd June 2023, the auditing firm submitted their resignation before the Board of Directors with immediate effect.
According to the statement of Deloitte “The financial statements of the company for the year ended March 31st 2022 are long delayed.”
Following the resignation of Deloitte, Byju’s appointed BDO (MSKA & Associates) as the statutory auditors. The newly appointed auditors were finalized after a rigorous selection process by the new Chief Financial Officer (CFO) Ajay Goel of Byju’s.
With the onset of the Covid-19 pandemic, Byju’s experienced considerable growth as students increasingly embraced online learning during lockdowns. However, in 2021, the company incurred a loss of $327 million. The company also witnessed huge layoffs in the past year and this year.
During May, the company faced a lawsuit filed by its lenders in a US court. The lenders claimed that Byju’s had missed payments and broken the loan agreement’s clauses, which prohibited material delays in the publication of financial results. The company was also accused by the lenders of misappropriating money through its US-based subsidiary, Alpha. Byju’s, however, refuted these accusations made against it.
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