Byju’s hits back at former auditor BDO amid financial dispute

In response to the resignation of its former auditor, BDO (MSKA & Associates), embattled edtech firm Byju’s has accused the audit firm of unethical practices and attempts to manipulate financial reports.

Byju’s has criticized BDO for allegedly suggesting the backdating of financial documents, an accusation supported by multiple call recordings where BDO representatives reportedly made such recommendations. Byju’s has firmly rejected these suggestions, maintaining that their commitment to ethical standards led to BDO’s resignation.

BDO's resignation followed its concerns about Byju’s financial health, including doubts over the recovery of Rs 1,400 crore from Dubai-based reseller More Ideas General Trading LLC, delays in financial reporting, and ongoing litigation with creditors. The audit firm cited these issues as reasons for its departure.

However, Byju’s contends that BDO’s resignation stems from its refusal to comply with questionable audit practices, not the financial concerns raised. The company pointed out that BDO failed to communicate with the appointed Insolvency Resolution Professional (IRP), crucial during Byju’s insolvency proceedings that began on July 16, 2024. Byju’s claims that despite multiple efforts by the IRP to engage with BDO, the audit firm did not respond, leading to misunderstandings and eventual resignation.

Byju’s has been proactive in addressing financial discrepancies, having initiated a forensic audit of transactions with its Dubai partner prior to BDO’s resignation. This audit was temporarily halted due to insolvency proceedings.