National Financing Reporting Authority

National Financing Reporting Authority

News: As it seeks to enhance engagement with stakeholders, the National Financial Reporting Authority (NFRA) will set up a single stakeholders’ advisory group as well as a research cell to support the group.

What is NFRA?
• NFRA is an independent regulator to oversee the auditing profession and accounting standards in India under Companies Act 2013. It came into existence in October 2018.
• After the Satyam scandal took place in 2009, the Standing Committee on Finance proposed the concept of the National Financial Reporting Authority (NFRA) for the first time in its 21st report.
• Companies Act, 2013 then gave the regulatory framework for its composition and constitution.

Powers and Functions:
• Recommend accounting and auditing policies and standards to be adopted by companies for approval by the Central Government;
• Monitor and enforce compliance with accounting standards and auditing standards;
• Oversee the quality of service of the professions associated with ensuring compliance with such standards and suggest measures for improvement in the quality of service;
• Perform such other functions and duties as may be necessary or incidental to the aforesaid functions and duties.
• It can probe listed companies and those unlisted public companies having paid-up capital of no less than Rs 500 crore or annual turnover of no less than Rs 1,000 crore.
• It can investigate professional misconduct committed by members of the Institute of Chartered Accountants of India (ICAI) for prescribed class of body corporate or persons.