Bright Com is a digital marketing company with global partners. The name of the company changed four times. Previously, the same company was named Lycos internet. The operations of the digital marketing company work for the global reach. The company owns publishers, agencies and businesses worldwide to reach the global population. EY audited only forty per cent of the Company’s revenue. Sixty per cent of the revenue come from US and Israel. The year 2020 and 2021 reveals there is a surge of 168 per cent in net profit and 130.08 per cent in net sales. SEBI wants to check the financial statement of the same company from 2015 to 2020. This blog brings out the points about capital market performance, SEBI violation and forensic audit importance. The Bright Com group confronted violations educate the importance of forensic audit.
Capital market performance:
SEBI regulate the capital markets. It takes care of the interest of the markets and investors. From 2019 to 2020, the Company reports show the impairment of assets. The GDPR norms collect charges from internet companies for data protection. The share price of Brightcom group as of 25th March is 90.30. There is a hike in the share price. The last share price was 78.05. The high share price for the past 52 weeks is 122.88. The market cap of Brightcom group within the software sector is 15. In the software sector, the peers of Brightcom group are Birlasoft ltd., Tanla platforms ltd., mastek ltd., R systems international ltd., Newgen software technologies ltd., black box ltd., Subex ltd., info beans technologies ltd., genesis international corporation ltd., and Datamatics global service ltd. The Company had an outstanding financial performance. The financial year 2021 last three months recorded as the numbers from 20 to 34. The stock has provided a return of 1400 per cent in the last year. Long term investors have doubled the return by investing in this Company. There was a crash of five per cent in the Company shares due to the SEBI violation issue. The argument from the Company side is that the internet Companies spend for the GDPR norms. And it is mandatory in the global environment. SEBI notified the stock exchanges about the audit. SEBI says that forensic audit is essential to improve the performance of the capital markets. The business of Brightcom is with the marketing agencies, direct marketers, and brand advertisers. The Company is divided into three parts such as software services, media, and future technologies.
The Companies in the stock market need to comply with the provision of the act. The penalty for non-compliance may be a maximum of one crore rupee. From the year 2020 to 2021, the market regulator said that it had completed the investigation of 140 cases. And taken up 94 new cases. From 2019 to 2020, the regulator completed 170 cases and took the investigation 161 new cases. The breakup of the 94 cases are as under: 41 market manipulation, price rigging, 3 cases related to takeovers, 30 cases deal with insider trading, and 20 cases fall under the category of miscellaneous. The decision about the violation is evidence centric, objectivity oriented, materiality related, and consistency related. The penalties go as monetary penalties and administrative warnings. The Company announced the preferential allotment of 500 crores. On 16th September 2021, the company ordered a forensic audit. The auditor must verify the manipulation in the books of accounts, misrepresentation, consolidated financials, wrongful diversion, key managerial person details, and business operations. A forensic audit will focus on the impairment of assets and also check the consolidated financial statement.
Forensic audit importance:
A forensic audit is a shield provided by the specialists. The following points elucidate the value of forensic audit:
• Forensic audits uncover embezzlement, extortion, fictitious transactions, bribes, kickbacks and conflict of interest.
• Technology and corporate governance are creating new types of fraudsters.
• The story of the frauds such as Xerox Corporation, Parmalat and Satyam computers have raised the standards of forensic auditing.
• The meaning of the term forensic is suitable for presenting in the court. The meaning of the forensic changes as per the business challenges.
• The understanding of the legal system, fraud knowledge, financial expertise, and business reality is essential for a forensic auditor.
• The job of a Forensic auditor is to check the documents and interview the related parties.
• Financial audit reports and forensic audit reports are different.
• A forensic audit is not advised with a standard format. It provides the answer for the fraud activities. So, the format is different.
• Forensic auditors think about the financial numbers and the business reality.
• Forensic auditors handle the breaks of agreement, mergers and acquisitions, risk management, economic crime investigations, value altering plans, tax investigations, civil litigation support, terrorist investigations, security exchange controls, and specialized audits.
• The corporates, government, society and regulators understand the importance of forensic audit as the fraud cases are increasing.
The changes in the corporate world are creating the gateway for auditing professionals to advise, guide, operationalize, and appear in auditing matters. The SEBI website and the ICSI website provide the details of the updating with the forensic audit. The publications provide insight into the changes in the auditing process. The digital accounting and assurance board has mentioned the eight new forensic accounting standards. The report should not be judgemental, express the views, guilt or innocence. Currently, no regulatory body has framed the standards for a forensic audit.