Mumbai: Price Waterhouse & Co Chartered Accountants LLP, a network firm of PwC India, has resigned as an auditor of BSE listed Eveready Industries India Ltd. (EIIL) citing few transactions relating to inter-company deposits.
EIIL on Saturday told the capital markets that Singhi & Co, Mumbai based audit firm, has replaced PwC as the auditor.
According to the people in the know PwC had sought details of certain deposits and questioned EIIL about how the company wishes to recover these. These transactions would now be scrutinised by the incoming auditor and will have to question EIIL about the same. This, unless the company makes the required adjustments in their books before the financial results are declared, said two people close to the development.
EIILs stock price was down by 3.61% or Rs 3 to close at Rs 80 on Saturday.
“PwC has expressed its inability to continue as the auditors of the company,” EIIL told the browsers on Saturday.
PwC had raised questions around Rs 62 crore in advances given to a lease hold company. “Neither the deed has been executed nor the refund claimed,” PwC clarified in the audit report. EIIL posted an EBITDA loss of Rs 11.3 crore as per the latest filings.
The resignation comes weeks after PwC resigned as auditor of Reliance Capital and Reliance Home Finance. PwC had not gone into the specifics but merely hinted that there were certain transactions involving the group companies. “We did not receive substantive/satisfactory response to our queries in light of our observation. Accordingly we sent letter dated 24 April 2019 under the provisions of section 143 (12) of Companies Act read with Rule 13 (2) (a)..”
This comes around the time when the regulators have been going after auditors. From the Reserve Bank of India (RBI) to the Ministry of Corporate Affairs (MCA) have been probing role of auditors in some cases.
Insiders point out that many large audit firms are relooking at all their audit assignments and want to steer clear of any potential risk.
“In all the cases where auditors are either penalised or being investigated, none of the promoters, companies or banks are being held accountable. This is a huge risk for the auditors and there is a feeling that they are being made aRead More – Source