Context:
NFRA recently pulled up a section of India Inc, including “a large listed firm”, for not complying with Indian Accounting Standards (Ind AS)
Relevance:
GS III: Indian Economy
Dimensions of the Article:
- National Financial Reporting Authority (NFRA)
- Functions and Duties
- Powers
National Financial Reporting Authority (NFRA):
- NFRA was established on October 1st, 2018 under the Companies Act, 2013
- It is an independent regulator overseeing the auditing profession and accounting standards in India
- The objective is to continuously improve the quality of corporate financial reporting in India
- The headquarters of NFRA is located in New Delhi.
Functions and Duties
- Recommends accounting and auditing policies and standards for approval by the Central Government
- Monitors and enforces compliance with accounting and auditing standards
- Oversees the quality of service of professions related to compliance and suggests measures for improvement
- Composition includes a chairperson with expertise in accountancy, auditing, finance, or law and up to 15 members
Powers
- NFRA can investigate professional or other misconduct by any member or firm of chartered accountants registered under the Chartered Accountants Act, 1949, either suo moto or on a reference made by the Central Government
- Has the same powers as a civil court under the Code of Civil Procedure, 1908 while trying a suit
-Source: Times of India
