What is NFRA?
NFRA stands for National Financial Reporting Authority
NFRA will be an independent regulator for the auditing profession.
NFRA would be an oversight body for auditors
Who is on the NFRA?
It will comprise a chairperson, three full-time members and a secretary.
Jurisdiction of NFRA
NFRA jurisdiction would extend to all listed companies as well as large unlisted public companies.
Task of NFRA
NFRA is tasked with the job of recommending accounting and auditing standards, ensuring compliance with them and overseeing the quality of service of the accounting and audit professions.
NFRA has also been given the power to investigate matters of professional misconduct by chartered accountants or CA firms, impose penalty and debar the CA or firm for up to 10 years.
NFRA shall: (a) have the power to investigate, either suo motu or on a reference made to it by the Central Government, for such class of bodies corporate or persons, in such manner as may be prescribed into the matters of professional or other misconduct committed by any member or firm of chartered accountants, registered under the Chartered Accountants Act, 1949; and (b) have the same powers as are vested in a civil court under the Code of Civil Procedure, 1908, while trying a suit.
Institute of Chartered Accountants of India (ICAI) will continue to have monopoly on training and qualifying chartered accountants, giving them licence to practice and regulating them. NFRA is not meant to replace the disciplinary jurisdiction of the ICAI.
What is ICAI’s role now?
ICAI’s role will 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.
ICAI will continue with its advisory role on accounting and auditing standards and policies by making its recommendations to NFRA.