SME Times News Bureau | 02 Mar, 2018
The
Union Cabinet on Thursday approved the proposal for establishment of
National Financial Reporting Authority (NFRA) and creation of one
post of Chairperson, three posts of full-time Members and one post of
Secretary for NFRA.
The
decision aims at establishment of NFRA as an independent regulator
for the auditing profession which is one of the key changes brought
in by the Companies Act, 2013.
The
inclusion of the provision in the Act was on the specific
recommendations of the Standing Committee on Finance (in its 21st report).
The
decision is expected to result in improved foreign/domestic
investments, enhancement of economic growth, supporting the
globalisation of business by meeting international practices, and
assist in further development of audit profession.
The
jurisdiction of NFRA for investigation of Chartered Accountants and
their firms under section 132 of the Act would extend to listed
companies and large unlisted public companies, the thresholds for
which shall be prescribed in the Rules.
The
Central Government can also refer such other entities for
investigation where public interest would be involved.
The
inherent regulatory role of ICAI as provided for in the Chartered
Accountants Act, 1949 shall continue in respect of its members in
general and specifically with respect to audits pertaining to private
limited companies, and public unlisted companies below the threshold
limit to be notified in the rules.
The
Quality Review Board (QRB) will also continue quality audit in
respect of private limited companies, public unlisted companies below
prescribed threshold and also with respect to audit of those
companies that may be delegated to QRB by NFRA.
Further,
ICAI shall continue to play its advisory role with respect to
accounting and auditing standards and policies by making its
recommendations to NFRA.