Deloitte steps down as auditor of Byju's and Aakash Educational
Deloitte, a major global audit firm, has resigned as the statutory auditor of Byju's, India's most valued startup, adding to the company's growing list of troubles. Deloitte cited long delays in receiving financial statements for the year ended March 31, 2022, and lack of communication regarding the resolution of audit report modifications for the previous year. Additionally, Deloitte expressed concerns about the readiness of the financial statements and underlying books and records for the year ended March 31, 2022, preventing them from commencing the audit. Consequently, Deloitte tendered its resignation with immediate effect.
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Deloitte, a major global audit firm, has resigned as the statutory auditor of Byju's, India's most valued startup, adding to the company's growing list of troubles. Deloitte cited long delays in receiving financial statements for the year ended March 31, 2022, and lack of communication regarding the resolution of audit report modifications for the previous year. Additionally, Deloitte expressed concerns about the readiness of the financial statements and underlying books and records for the year ended March 31, 2022, preventing them from commencing the audit. Consequently, Deloitte tendered its resignation with immediate effect.
To fill the vacancy left by Deloitte, Byju's has appointed BDO (MSKA & Associates) as its replacement and statutory auditors for the year starting from FY22, with a contract spanning five years. BDO will also serve as the statutory auditor for the consolidated group and audit Aakash Educational Services, which is preparing for an initial public offering (IPO).
Deloitte's resignation comes at a time when key board members of Byju's have also resigned due to differences with founder Byju Raveendran on critical operational matters. The departure of Deloitte leaves Byju's in a state of uncertainty, as the company's FY21 results had revealed irregularities in revenue recognition practices. Deloitte advised Byju's to defer approximately 40 percent of its FY21 revenue to subsequent years. The unexpected decline in revenue during FY21, despite the significant growth experienced by the edtech industry globally amid the COVID-19 pandemic, has raised concerns. Byju's reported losses of over Rs 4,500 crore in FY21.
The resignation of Deloitte and the associated challenges faced by Byju's underscore the importance of resolving financial and operational issues to maintain trust and transparency in the company's operations. Byju's will need to address these concerns promptly to restore investor confidence and ensure smooth operations moving forward.
