New Delhi, February 17, 2018

Chartered accountants' apex body ICAI on Friday said it has taken suo motu cognisance of the $1.77 billion fraud at Punjab National Bank and has sought information from investigation agencies besides setting up a group to study the system issues arising out of the incident.

The Institute of Chartered Accountants of India (ICAI) would review the Punjab National Bank matter to look at whether there have been lapses on the part of auditors.

ICAI President Naveen N D Gupta said it has taken suo motu cognisance of the fraud at Punjab National Bank.

"The Financial Reporting Review Board (FRRB) has been advised to "initiate suo motu review" of Punjab National Bank and Gitanjali Gems (matter)," he told PTI.

The board, set up by the institute, reviews the compliance with various accounting and auditing standards.

In a statement issued in the evening, Gupta said the institute has suo motu triggered its disciplinary mechanism by writing to the bank concerned, markets regulator Sebi as well as probe agencies -- Enforcement Directorate and CBI -- seeking details of their investigations in the matter.

According to him, the institute has on its own constituted a high power group to study the systemic issues in the Punjab National Bank matter. The panel would suggest remedial measures and improvement in the banking system to ensure preventive measures to avoid such type of incidents, he added.

"It needs to be emphasised that ICAI would be actively pursuing the issue with the concerned agencies and stakeholders so as to examine the matter in detail to suggest improvements," Gupta said.

However, the statement did not specifically mention about Gitanjali Gems.

According to an official, the institute would be looking at the role of auditors in these cases to ascertain whether there have been any violation at their end.

[The Deccan Herald]