When auditors raise the red flag against certain questionable business

However, there are many in the fraternity, like former ICAI president Amarjit Chopra, who feel one may be making too much out of the observations made by auditors

Over the past few months, there have been several instances of auditors raising the red flag against certain questionable business and accounting practices followed by their clients. The qualifications and observations noted by auditors include doubts over the ability of a firm or one of its subsidiaries to continue as a going concern, questions around the adequacy of a company’s internal control mechanism or even certain transactions undertaken by the promoters. In one case, the statutory auditors even refused to sign quarterly financial results, unless the promoters presented a clear path on how they plan to return the money borrowed