NFRA finds big gaps in statutory audit of IL&FS Transportation Networks

The authority has also found the auditor to be in violation of ICAI Code of Ethics 2019

The National Financial Reporting Authority (NFRA) has found that the initial appointment of the audit firm and its continuation as a statutory auditor of IL&FS Transportation Networks (ITNL) was prima facie illegal and void and that the company’s losses were understated. 

The statutory auditor for ITNL for 2017-18 (FY18) was S.R. Batliboi (SRBC & Co LLP) & Co. LLP, which uses the EY brand and trademark for obtaining and providing audit services and is an independent member firm of Ernst & Young Global.

In its audit quality review report, the NFRA has said that ITNL’s financial exposure to its subsidiaries,