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PwC Flagged Discrepancies In GoMechanics' FY 2020 Audit: Report

Car repairing unicorn start-up GoMechanic has been in the news for the past two days as financial irregularities came to light based on a due diligence report by EY

PwC Flagged Discrepancies In GoMechanics' FY 2020 Audit: Report
POSTED ON January 20, 2023 6:11 PM

The United Kingdom-headquartered Pricewaterhouse Cooper (PwC), which audited the troubled Indian start-up GoMechanic in FY2020, had earlier raised some questions regarding the house's business activities and assets, the Economic Times ( ET) reported.

Sources who are aware of the development told the ET that PwC pointed out some 'qualifications' in the report and told the company to fix those. 

One of the top executives of PwC India told ET that having qualifications in audit reports always carries a negative impact. It suggests that the company has not followed adequate accounting practices. The auditor also highlighted some discrepancies regarding inventory records for receipts and service partner workshops. 

“Look, qualifications are negative in general. What matters after that is what the company does with that information flagged by the auditor. Sometimes, at an early stage, investors feel founders will fix these processes over the long-term once they grow bigger,” the senior executive from PwC told ET. 

The audit saga became public a day after Amit Bhasin, the CEO of GoMechanic confessed in a LinkedIn post that the company did not provide accurate business numbers and 'got carried away' to prioritise growth at any cost. 

PwC only audited the company in 2020. Later, it was replaced by KPMG for FYs 2021 and 2022. 

GoMechanic has been in the news for the past two days as financial irregularities came to light based on a due diligence report by EY. The car repairing start-up was in the process to raise $80 million from SoftBank's Vision Fund and Malaysian Khazanah Nasional. Suspecting GoMechanic's financial statements, the prospective investors hired EY for an audit report and this report revealed some discrepancies made by the company. 
 

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