Audit issues spark debate around Byju's financials
An intriguing development has surfaced regarding the auditing of Byju's financial records, with the company's CEO himself alleging certain irregular requests from the auditor. In a detailed interview, Byju Raveendran shed light on the recent resignation of MSKA & Associates – the audit firm that handled Byju's financials as an affiliate of BDO India.
Raveendran claimed the auditors had suggested backdating some reports, which Byju's refused to do as it would be illegal. This apparently led to increased scrutiny of past transactions, though the auditors did not make progress on requested clarifications for over 45 days. Curiously, they also failed to communicate with the insolvency resolution professional (IRP) appointed by the courts to oversee Byju's during ongoing insolvency proceedings.
Byju's has categorically denied any wrongdoing on its part, stating it did not agree to unethical requests for backdated documentation. Management sources say multiple conversations confirm the auditing firm's insistence on such an illegality as the trigger for their exit. With the suspension of Byju's board due to the insolvency case, proper processes were not followed by the auditors in voicing concerns.
The dueling viewpoints have brought the spotlight back on questions surrounding Byju's exponential growth story. While no definite conclusions can be drawn at this stage, it ensures the financial and compliance aspects around India's most valuable startup will face intense analyst and regulatory scrutiny. Both sides will need to cooperate fully with investigators to shed light on this intriguing saga.
