INSUBCONTINENT EXCLUSIVE:
National Financial Reporting Authority has found serious flaws in audit review of IL-FS TransportationIndependent regulator National
Financial Reporting Authority (NFRA) in its review of the statutory audit of IL-FS Transportation Networks Limited (ITNL) for 2017-18, has
noted that the initial appointment and continuation of the company's audit firm was “prima facie illegal and void”.Making some serious
observations in its audit quality review report of ITNL's account books, NFRA has said that the company's financial exposure to its
associate firms totalling around Rs 3,346 crore was not valued as per accounting norms.Also ITNL's losses during 2017-18, the year for which
the accounts were evaluated, were understated by around Rs 2,021 crore, the report as quoted by the Ministry of Corporate Affairs, said.NFRA
also observed that ITNL's audit firm failed to properly evaluate the use of the “going concern” basis of accounting by the management
and therefore failed to gauge the implications in the auditor's report.Going concern is an accounting term, which is used for a company that
has resources required to continue operations for an indefinite period of time.NFRA prepares audit quality reports of companies under the
provisions of Companies Act and NFRA Rules of 2018, which require it to monitor and ensure compliance by companies with the country's
accounting and auditing standards.The independent regulator was set up by the government in October 2018 after a need was felt to set up a
body for enforcing accounting standards in the corporate sector in order to enhance people's confidence in financial disclosures of
