ICAI to study if auditors complied with accounting standards & best practices in IPL
India’s accounting regulator has sought the financial statements of the eight Indian Premier League franchises to study if their auditors complied with accounting standards and best practices, joining other government agencies combing through the T20 cricket tournament for a stack of sins.
“We are collecting details about the franchisees, particularly their financial statements,” Institute of Chartered Accountants of India (ICAI) president Amarjit Chopra told, adding that the agency has already approached the Registrar of Companies (RoC) in this regard.
IPL is three seasons old, but the names of auditors who have certified the financial results of the teams are still in the dark. A host ofgovernment agencies have waded into a wide-ranging probe on possible tax evasions and other offenses by IPL teams, emboldened by the controversies surrounding the tournament.
ICAI too is a part of the IPL probe on the ground that all teams are owned by private limited companies. The ICAI inquiry is independent of the scrutiny into IPL’s affairs by its parent, the corporate affairs ministry, though it will assist the probe by providing its expertise in matters of financial reporting.
“We would like to collaborate with the ministry to find out if all accounting standards have been followed by the franchises,” said Mr Chopra.
The ministry too is gathering details about the franchises, including their agreements with the IPL, bidding arrangements and equity structure from the RoCs.
The ICAI inquiry could unearth the collusion between IPL teams and their auditors over their revenue classification and source of funds. Another aspect that is likely to catch its attention is the high valuations for the IPL teams. Valuation, though not strictly done by chartered accountants, is a complex accounting method.
“The kind of financial irregularities we are talking about could not have been possible without the knowledge of the auditors,” said a financial expert, requesting anonymity.
