Statutory auditors removed prematurely after issuing qualified opinion

The Jammu and Kashmir Bank’s central statutory auditors were removed prematurely after issuing qualified opinions.

Three central statutory auditors of the bank, O Aggarwal and Co, Dharam Raj and Co, and Arora Vohra and Co removed by the Comptroller and Auditor General of India or the CAG in September.

The auditors had served two out of three years of tenure; their term was to expire in the financial year 2024.

The action came after auditors issued a qualified opinion on the bank’s Financial Year 2023 accounts as well as the first quarter of the current financial year 2024. This was in reference to earned funds through the Employee Stock Purchase Scheme (ESPS) 2023.

The auditors raised red flags, suggesting that employees used bank loans to purchase the shares, which was against the RBI’s instructions.

This statutory auditors’ report received no complaints from the CAG.

A qualified opinion in accounting means that financials are fairly represented with the exception of specific areas.

Jammu and Kashmir Bank already informed the stock exchanges about the change of auditors in October. The bank also appointed Gupta and Associates, Lunawat and Co, and JCR and Co as its new central statutory auditors.

The bank stated that The Office of the Comptroller and Auditor General of India has appointed a new set of Statutory Central Auditors for the Bank for the financial year 2023-24, according to information released to stock exchanges. It is important to note that the Jammu and Kashmir Bank’s Statutory Central/Branch Auditors are appointed/re-appointed by the Office of the Comptroller and Auditor General of India (CAG), with the approval of the Reserve Bank of India (RBI), and the Bank has no role in the appointment/re-appointment of Statutory Central/Branch Auditors.