Economy
The Centre
on Saturday said its committed to strengthening the working of the National
financial reporting Authority (NFRA), the independent regulatory body setup
under the corporate Affairs Ministry for the auditing
professional.
·
NFRA is an
independent regulatory body set up under Section 132 of the companies Act.
·
It was established by the Central
Government 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.
·
The National Financial Reporting Authority
(NFRA) was constituted in 2018 under Companies Act, 2013.
·
The
Companies Act requires the NFRA to have a chairperson who are going to be
appointed by the Central Government and a maximum of fifteen members.
·
The duties of the NFRA are to:
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 the service of
the professions associated with ensuring compliance with such a 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.
·
Prior to the constitution of this
authority, the Central Government would prescribe accounting standards on the
recommendation of ICAI.
·
The Authority shall have the power to monitor
and enforce compliance with accounting standards, oversee the quality of
service or undertake an investigation of the auditors of the following class of companies and bodies corporate, namely:- companies whose securities are
listed on any stock exchange in India or outside India; Unlisted public
companies having paid-up capital of not less than rupees five
hundred crores or having annual turnover of not less than rupees one thousand
crores or having, in aggregate, outstanding loans, debentures and deposits of
not less than rupees five hundred crores as on the 31st March of immediately
preceding financial year;
·
Insurance companies, banking companies,
companies engaged in the generation or supply of electricity Anybody corporate
or company or person, or any class of bodies corporate or companies or persons,
on a reference made to the Authority by the Central Government in public
interest; HQ: New Delhi 5.
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