NFRA starts off on the wrong foot

Abstract

The presence of three part-time members from the ICAI raises troubling questions over the regulator’s neutrality There was much hope when the finance minister announced the setting up of the NFRA on March 1. The Centre’s notification of March 21 regarding its composition has, unfortunately, put paid to that hope. The NFRA was first proposed as an independent regulator of accounting and auditing in the wake of the Satyam scandal which went undetected for many years by the company’s auditors. There was a public outcry and calls for a complete overhaul of the regulation of the accounting and auditing profession in India.

In 2010, the report of the Standing Committee on Finance of the Lok Sabha on the Companies Bill 2009 recommended the creation of a supervisory mechanism with a “mandate not only to set and oversee accounting and auditing standards, but also to monitor the quality of audit undertaken across the corporate sector” (paragraph 37). As a result, the Companies Act 2013 included Section 132 relating to the NFRA. Read more at: https://www.thehindubusinessline.com/opinion/nfra-starts-off-on-the-wrong-foot/article23357050.ece