The CBI has decided to outsource the forensic auditing of Prayag Group of Companies in connection with the investigation of case number 35/2014 being probed by Special Investigation Team based in Kolkata
Unable to manage volume of documents seized during raids and lack of technical expertise to unravel the intricate maze of illegal financial network, Central Bureau of Investigation (CBI) director Alok Kumar Verma has decided to rope in private players to carry out "forensic auditing" in chit fund scams the agency are probing.
To start with, the CBI has decided to outsource the forensic auditing of Prayag Group of Companies in connection with the investigation of case number 35/2014 being probed by Special Investigation Team based in Kolkata. In the case, the agency had filed a charge-sheet against Basudeb Bagchi, former CMD of two companies of Prayag Group — Prayag Infotech Hi-Rise Ltd and Prayag Infotech Network Pvt Ltd — and then MD Avik Bagchi.
In a note accessed by DNA, CBI sated, "On the order of Supreme Court, CBI is conducting investigation in huge chit fund scam where large number of financial statements, bank accounts statements are to be analysed and expert opinion is required as to its general result and finding clinching evidence of crime committed."
It further pointed out that the purpose to outsource is to assist the investigating officers and court in explaining the various documents and its analysis by way of submitting a detailed forensic audit report and depositing before the court.
The agency said documents can be audited at the office of auditor. However, there should be a clause of secrecy. Also the private auditor has to spend some days in CBI office for understating the case, and discussions with investigating officers. "The firms should be registered with the Indian Institute of Chartered Accounts, New Delhi," the note stated. The agency has also put up a clause that there should not be conflict of interest with the private auditors.
A senior CBI officer stated, "Forensic auditing is a technique to legally determine whether accounting transactions are in consonance with various accounting, auditing and legal requirements and eventually determine whether any fraud has taken place.
Forensic auditing is a blend of accounting, auditing and investigative skills. In doing so, the veil of corporate entity is pierced to establish the intentions of persons behind such transactions."
Also the CBI is probing more than 60 high-profile chit fund cases spread across the country and are facing huge problems with the investigation while goring through maze of financial illegal dealings.
‘CAG WOULD HAVE BEEN A BETTER CHOICE’
- On decision of CBI outsourcing the work of forensic auditing, a senior IPS officer in the agency stated that in place of bringing a private auditor in an investigation the best would have been to rope in Comptroller and Auditor General (CAG).
- Currently, former Union Home Secretary Rajiv Mehrishi is the Comptroller and Auditor General of India.
- CAG only is empowered to audit all expenses from the combined fund of the Union or state governments, whether incurred within India or outside.
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