MUMBAI: Investigations into the affairs at IL&FS Financial Services ( IFIN ) indicated that the company’s management might have stonewalled its auditors by giving written assurances every time a question was raised, people with direct knowledge of the matter said.Whenever an auditor asked a question over a document, contract or regulation, the management would issue a “management representation letter”, the Serious Fraud Investigation Office (SFIO) has found. Such letters from the senior management attest to accuracy of the financial statement and documents submitted to auditors. Deloitte was the sole auditor for 2015-16 and 2016-17. In its ‘letter of comfort’, the company management said it was taking all actions to deal with the concerns.“The audit firms shouldn’t have relied so much on management certifications. As per the statements submitted by the audit executives to the SFIO, in many cases they had questioned the management about loan transactions but the usual defence was to dish out a management representation letter.

Source: Economic Times June 11, 2019 01:18 UTC