A forensic audit is a tool for understanding the operations of the company. Government and SEBI, the regulatory body order the auditing firms to do a forensic audit. The audit report from an Indian auditing firm explains the operational and financial processes of the company. Recently, two cases enticed the commercial industry with the necessity for a forensic audit. Hockey India and Fortis are the names associated with the inspection for understanding the internal system. This blog engages the readers with the latest news in India about the forensic audit.
Delhi high court ordered a forensic audit
Dilip Tirkey is the president of Hockey India. The Delhi high court wants to understand the operations of Hockey India. For this government-aided auditing project, Deloitte is the auditing partner. The chief justice of the high court granted six weeks for the forensic audit. Mr Satish Chandra Sharma is the chief justice. Mr Subramonium Prasad is the justice. Initially, HI officials did not cooperate with auditing officials for a forensic audit. The new secretary, Bhola Nath Singh mentioned that the details will be provided with the right spirit and law. A petition was lodged by the former India captain regarding the sponsorship money received by the company. This petition is the reason behind the post-change of Narinder Batra. The government spends more than 30 crores to promote hockey. In the year 2020, money came from the Odisha government. The Government want to understand the money management of Hockey India. Former Indian captain Aslam Sher Khan is trying to understand the functions of Hockey India.
Hockey India annual awards:
The different awards of Hockey India are as follows: award for goalkeeper of the year, invaluable contribution, and award for defender of the year, the award for midfielder of the year, the award for upcoming player of the year, the award for forward of the year, the award for player of the year, and award for lifetime achievement. In the year 2016, Madhya Pradesh won the award for outstanding achievement. In 2020, the Department of sports and youth services government of Odisha won the award for outstanding achievement. Krishnan B.Pathak, Harmanpreet Singh, Mandeep Singh, Neha Goyal, Lalremsiami, Vivek Sagar Prasad, Manpreet Singh, Rani Rampal, and Harbinder Singh are the recipients of the award declared in the year 2020.
Sponsors for Hockey India:
Indian Hockey team with players, represented India in Tokyo Olympics. The Odisha government support the Indian Hockey team with sponsorship money. The Chief Minister of Odisha, Naveen Patnaik, announced the sponsorship money in a felicitation ceremony. Each player of the Indian Hockey team was honoured with a cash gift of ten lakh by the Odisha government. The support team of Hockey India was motivated with a cash reward of five lakh. The Odisha government sponsor the Indian team since 2018. The men’s team of Indian hockey team made India proud with a Medal in the Tokyo Olympics. The women team of Indian hockey team marked their performance with fourth in the Olympic Games. The Indian Hockey team have created history with their performance. The chief minister said the partnership will continue for a further ten more years. The audience highlighted the achievement with banners and posters. The victory of the Indian team is the spirit that attracts the sponsors.
High court order to Hockey India:
The Delhi high court placed Hockey India under the observation of the committee. The COA check the monetary management and national sports code. HC ordered Hockey India to remove the references in the memorandum of association. The persons without voting rights affect the election process. There was a case with Batra for misuse of 35 lakhs of money from the funds of Hockey India. The CoA will manage the operations till fresh elections are held. The fresh election will be as per the sports code and constitution. Deloitte is taking charge as the auditing partner for the forensic audit of the company.
Deloitte is conducting a forensic audit:
Sponsorship money and administration of Hockey India is a matter of discussion that led to a forensic audit. The government of India spent more than 100 crores on this sports association. The government money and its expectation ended up with a forensic audit. The audit report will be a critique of the value of the FIH president. The petition of Khan fired the position of Narender Batra.
The forensic audit report of Fortis
Fortis Healthcare Ltd is in the news due to regulatory lapses. The promoters are found guilty of financial fraud. The company was involved in treasury activities with money transfers as a loan of nearly 4.94 billion. The company has planned to sell the stake of the company to shortlisted bidders. Supreme Court ordered a forensic audit. Fortis is seeking advice from legal professionals to plan the course of action and sales. Former promoters are sentenced to six months in jail. The court said that the sale of shares to a Malaysia-based company is illegal.
The acquisition and foreign investor issues:
In 2018, there is an acquisition of two third of Fortis’ shares by IHH. After the acquisition, there were cost-cutting plans. Now there is a dispute between the ex-Fortis owners, the Singh brothers and Daiichi Sankyo Co, The Japanese drug maker. The court ordered the forensic audit to understand the open offer between Fortis and IHH, a healthcare company from Malaysia. These dealings convey the Indian hospital chain with Japan and Malaysia. The healthcare supply chain reduces costs and enhances patient care.
The reasons for forensic audit:
The forensic audit would be ordered by a court or regulatory body to check the preferential allotment, sale of shares, acquisition, and usage of sponsorship money. Forensic audit reports give the required details with proof from the financial statements.
Conclusion:
In this context, the latest news that chronicles auditing demand is analysed. The two companies are engaged in the sports and healthcare domain. Irrespective of their service and profit, the documents, data, money management and ownership laws framed multiple questions. Students learning chartered accountancy and cost accountancy course need to understand the value of evidence-based forensic audit.
