SR Batliboi & Co is an audit arm of accounting major Ernst & Young.
- Mannu Arora
- ETCFO
- June 03, 2019, 20:18 IST
- Updated: June 03, 2019, 23:32 IST
The Reserve Bank of India on Monday banned SR Batliboi and Co. LLP from conducting commercial bank audits for a year.
SR Batliboi & Co is an audit arm of accounting major Ernst & Young.
“…on account of the lapses identified in a statutory audit assignment carried out by the firm, M/s S.R.Batliboi & Co. LLP, Chartered Accountants it has been decided that RBI will not approve the said firm for carrying out statutory audit assignments in commercial banks for one year starting from April 1, 2019,” the RBI said in a statement.
The action taken in the matter has been communicated to the Institute of Chartered Accountants of India, it added. RBI did not disclose the case where in it identified the lapses by SR Batliboi and Co.
Statutory Auditors (SAs) of banks help ensure financial stability and credibility to financial statements of banks with their audits. Quality bank audits provide valuable inputs in the supervisory process of the RBI’s for commercial banks.
“It is a positive development. It should be followed up with the criminal action because disinformation by banks is criminal under section 46 (1) of the Banking Regulation Act 1949,” said independent banking analyst Hemindra Hazari.
“In case of commercial banks, Statutory auditors have a huge responsibility. Their report is relied upon by several stakeholders. We will see zero tolerance by regulators in financial sector. At the same time the audit effort and therefore fees shall rise,” commented Ashvin Parekh, Managing Partner at Ashvin Parekh Advisory Services.
When contacted with SR Batliboi and Co. LLP, it said in an official statement, “We have learnt of this development from the press release issued by RBI and are not aware of further details. Accordingly, we will be unable to comment further at this stage.”
