EY Audit of Failed Company Was ‘Illegal,’ India Regulator Says

EY’s Indian arm is contesting a report by India’s accounting watchdog that says the firm broke audit rules in its work for a controversial finance company.

SRBC & Co LLP, an Ernst & Young LLP network member firm in India, said Monday by email that it was “disappointed” with the National Financial Reporting Authority’s findings related to its audits of IL&FS Transportation Networks Ltd. (ITNL) and that it had followed the applicable audit standards.

It was responding to a scathing Sept. 23 audit quality review, in which the watchdog said the firm had failed to flag problems over ...