The Big Four may be blocked from doing Indian audits for years to come
They are under fire after scandals, most recently the collapse of IL&FS
GLOBAL AUDITORS have had a torrid time of late. KPMG is haemorrhaging clients in South Africa after allegations of fraud linked to its work for the powerful Gupta family; Deloitte is under investigation in both America and Malaysia relating to scandal at 1MDB, a Malaysian state-development fund. In Britain the Big Four face threats of break-up after the failure last year of Carillion, a big government contractor for which all four had done work. Now Indian prosecutors have the auditors in their sights.
The most serious case concerns the collapse last year of IL&FS, a monstrously complex financial firm with deep state ties. On July 15th the corporate-affairs ministry will argue before a commercial court to have Deloitte’s and KPMG’s local affiliates suspended from doing audits for five years because of flaws in their work for an IL&FS subsidiary. Ernst & Young (EY) is under fire, too: its local affiliate audited IL&FS and another subsidiary. It had already been suspended for a year from doing bank audits because of its work for Yes Bank, India’s fourth-biggest private lender. PwC, meanwhile, faces a two-year suspension relating to work for Satyam, a computer-services firm that went bust a decade ago.
This article appeared in the Finance & economics section of the print edition under the headline "Qualified opinion"
Finance & economics June 29th 2019
- London’s reign as the world’s capital of capital is at risk
- Russia is heaven for bondholders and hell for stockpickers
- An idea for a parallel currency resurfaces in Italy
- The Big Four may be blocked from doing Indian audits for years to come
- The war on money-launderers’ vehicle of choice intensifies
- Another European fund manager runs into concerns over liquidity
- Displays dedicated to explaining economics offer marginal returns
- The global economy is on a knife-edge
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