{"id":8305,"date":"2022-03-14T00:00:00","date_gmt":"2022-03-14T00:00:00","guid":{"rendered":"https:\/\/www.nextias.com\/current_affairs\/uncategorized\/14-03-2022\/national-financial-reporting-authority\/"},"modified":"2025-07-25T16:52:51","modified_gmt":"2025-07-25T11:22:51","slug":"national-financial-reporting-authority","status":"publish","type":"post","link":"https:\/\/www.nextias.com\/ca\/current-affairs\/14-03-2022\/national-financial-reporting-authority","title":{"rendered":"National Financial Reporting Authority"},"content":{"rendered":"<p><span style=\"font-size: 13pt;\"><span style=\"font-family: 'Book Antiqua',serif;\"><span style=\"color: #000000;\"><strong><u>In News<\/u><\/strong><\/span><\/span><\/span><\/p>\n<ul>\n<li style=\"list-style-type: disc;\"><span style=\"font-size: 12pt;\"><span style=\"font-family: 'Book Antiqua',serif;\"><span style=\"color: #000000;\">The government has appointed former finance secretary Ajay Bhushan Pandey as chairman of the<\/span><\/span><\/span><span style=\"font-size: 12pt;\"><span style=\"font-family: 'Book Antiqua',serif;\"><span style=\"color: #000000;\"><strong> National Financial Reporting Authority (NFRA)<\/strong><\/span><\/span><\/span><span style=\"font-size: 12pt;\"><span style=\"font-family: 'Book Antiqua',serif;\"><span style=\"color: #000000;\"> for a period of three years.<\/span><\/span><\/span><\/li>\n<\/ul>\n<p><span style=\"font-size: 13pt;\"><span style=\"font-family: 'Book Antiqua',serif;\"><span style=\"color: #000000;\"><strong><u>National Financial Reporting Authority<\/u><\/strong><\/span><\/span><\/span><\/p>\n<ul>\n<li style=\"list-style-type: disc;\"><span style=\"font-size: 12pt;\"><span style=\"font-family: 'Book Antiqua',serif;\"><span style=\"color: #000000;\"><strong>Regulatory Body:<\/strong><\/span><\/span><\/span>\n<ul>\n<li style=\"list-style-type: circle;\"><span style=\"font-size: 12pt;\"><span style=\"font-family: 'Book Antiqua',serif;\"><span style=\"color: #000000;\">It is a regulatory body <\/span><\/span><\/span><span style=\"font-size: 12pt;\"><span style=\"font-family: 'Book Antiqua',serif;\"><span style=\"color: #000000;\"><strong>constituted <\/strong><\/span><\/span><\/span><span style=\"font-size: 12pt;\"><span style=\"font-family: 'Book Antiqua',serif;\"><span style=\"color: #000000;\">by the Government of India under <\/span><\/span><\/span><span style=\"font-size: 12pt;\"><span style=\"font-family: 'Book Antiqua',serif;\"><span style=\"color: #000000;\"><strong>Sub Section (1) of section 132 of the Companies Act, 2013 <\/strong><\/span><\/span><\/span><span style=\"font-size: 12pt;\"><span style=\"font-family: 'Book Antiqua',serif;\"><span style=\"color: #000000;\">to oversee <\/span><\/span><\/span><span style=\"font-size: 12pt;\"><span style=\"font-family: 'Book Antiqua',serif;\"><span style=\"color: #000000;\"><strong>compliance with Accounting and Auditing Standards <\/strong><\/span><\/span><\/span><span style=\"font-size: 12pt;\"><span style=\"font-family: 'Book Antiqua',serif;\"><span style=\"color: #000000;\">by companies that can be described as <\/span><\/span><\/span><span style=\"font-size: 12pt;\"><span style=\"font-family: 'Book Antiqua',serif;\"><span style=\"color: #000000;\"><strong>Public Interest Entities (PIEs).<\/strong><\/span><\/span><\/span><span style=\"font-size: 12pt;\"><span style=\"font-family: 'Book Antiqua',serif;\"><span style=\"color: #000000;\">\u00a0<\/span><\/span><\/span><\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<ul>\n<li style=\"list-style-type: disc;\"><span style=\"font-size: 12pt;\"><span style=\"font-family: 'Book Antiqua',serif;\"><span style=\"color: #000000;\"><strong>Composition:<\/strong><\/span><\/span><\/span>\n<ul>\n<li style=\"list-style-type: circle;\"><span style=\"font-size: 12pt;\"><span style=\"font-family: 'Book Antiqua',serif;\"><span style=\"color: #000000;\">The Companies Act requires the NFRA to have a <\/span><\/span><\/span><span style=\"font-size: 12pt;\"><span style=\"font-family: 'Book Antiqua',serif;\"><span style=\"color: #000000;\"><strong>chairperson<\/strong><\/span><\/span><\/span><span style=\"font-size: 12pt;\"><span style=\"font-family: 'Book Antiqua',serif;\"><span style=\"color: #000000;\"> who will be appointed by the Central Government and a <\/span><\/span><\/span><span style=\"font-size: 12pt;\"><span style=\"font-family: 'Book Antiqua',serif;\"><span style=\"color: #000000;\"><strong>maximum of 15 members.<\/strong><\/span><\/span><\/span><\/li>\n<\/ul>\n<\/li>\n<li style=\"list-style-type: disc;\"><span style=\"font-size: 12pt;\"><span style=\"font-family: 'Book Antiqua',serif;\"><span style=\"color: #000000;\"><strong>Functions and Duties:<\/strong><\/span><\/span><\/span>\n<ul>\n<li style=\"list-style-type: circle;\"><span style=\"font-size: 12pt;\"><span style=\"font-family: 'Book Antiqua',serif;\"><span style=\"color: #000000;\"><strong>Recommend accounting and auditing policies<\/strong><\/span><\/span><\/span><span style=\"font-size: 12pt;\"><span style=\"font-family: 'Book Antiqua',serif;\"><span style=\"color: #000000;\"> and standards to be adopted by companies for approval by the Central Government;<\/span><\/span><\/span><\/li>\n<li style=\"list-style-type: circle;\"><span style=\"font-size: 12pt;\"><span style=\"font-family: 'Book Antiqua',serif;\"><span style=\"color: #000000;\"><strong>Monitor and enforce<\/strong><\/span><\/span><\/span><span style=\"font-size: 12pt;\"><span style=\"font-family: 'Book Antiqua',serif;\"><span style=\"color: #000000;\"> compliance with accounting standards and auditing standards;<\/span><\/span><\/span><\/li>\n<li style=\"list-style-type: circle;\"><span style=\"font-size: 12pt;\"><span style=\"font-family: 'Book Antiqua',serif;\"><span style=\"color: #000000;\"><strong>Oversee the quality of service<\/strong><\/span><\/span><\/span><span style=\"font-size: 12pt;\"><span style=\"font-family: 'Book Antiqua',serif;\"><span style=\"color: #000000;\"> of the professions associated with ensuring compliance with such standards and suggest measures for improvement in the quality of service;<\/span><\/span><\/span><\/li>\n<li style=\"list-style-type: circle;\"><span style=\"font-size: 12pt;\"><span style=\"font-family: 'Book Antiqua',serif;\"><span style=\"color: #000000;\"><strong>Protect the public interest<\/strong><\/span><\/span><\/span><span style=\"font-size: 12pt;\"><span style=\"font-family: 'Book Antiqua',serif;\"><span style=\"color: #000000;\"> and the interests of investors, creditors and others associated with the companies or bodies.<\/span><\/span><\/span><\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<ul>\n<li style=\"list-style-type: disc;\"><span style=\"font-size: 12pt;\"><span style=\"font-family: 'Book Antiqua',serif;\"><span style=\"color: #000000;\"><strong>Jurisdiction:<\/strong><\/span><\/span><\/span><\/li>\n<\/ul>\n<ul>\n<li style=\"list-style-type: circle;\"><span style=\"font-size: 12pt;\"><span style=\"font-family: 'Book Antiqua',serif;\"><span style=\"color: #000000;\">The jurisdiction of NFRA for investigation of Chartered Accountants and their firms under section 132 of the Act would extend to listed <\/span><\/span><\/span><span style=\"font-size: 12pt;\"><span style=\"font-family: 'Book Antiqua',serif;\"><span style=\"color: #000000;\"><strong>companies and large unlisted public companies<\/strong><\/span><\/span><\/span>\n<ul>\n<li style=\"list-style-type: square;\"><span style=\"font-size: 12pt;\"><span style=\"font-family: 'Book Antiqua',serif;\"><span style=\"color: #000000;\">The NFRA is tasked to investigate audit of <\/span><\/span><\/span><span style=\"font-size: 12pt;\"><span style=\"font-family: 'Book Antiqua',serif;\"><span style=\"color: #000000;\"><strong>Listed Companies and Unlisted companies<\/strong><\/span><\/span><\/span><span style=\"font-size: 12pt;\"><span style=\"font-family: 'Book Antiqua',serif;\"><span style=\"color: #000000;\"> with net worth not less than Rs 500 crore or paid-up capital of not less than Rs 500 crore or annual turnover not less than Rs 1,000 crore as on March 31 of immediately preceding financial year, and companies having securities listed outside India.\u00a0<\/span><\/span><\/span><\/li>\n<li style=\"list-style-type: square;\"><span style=\"font-size: 12pt;\"><span style=\"font-family: 'Book Antiqua',serif;\"><span style=\"color: #000000;\"><strong>The Centre further has the power<\/strong><\/span><\/span><\/span><span style=\"font-size: 12pt;\"><span style=\"font-family: 'Book Antiqua',serif;\"><span style=\"color: #000000;\"> to refer the entities for investigation where public interest would be involved. The rest are regulated by ICAI.<\/span><\/span><\/span><\/li>\n<li style=\"list-style-type: square;\"><span style=\"font-size: 12pt;\"><span style=\"font-family: 'Book Antiqua',serif;\"><span style=\"color: #000000;\">The inherent regulatory role of <\/span><\/span><\/span><span style=\"font-size: 12pt;\"><span style=\"font-family: 'Book Antiqua',serif;\"><span style=\"color: #000000;\"><strong>ICAI<\/strong><\/span><\/span><\/span><span style=\"font-size: 12pt;\"><span style=\"font-family: 'Book Antiqua',serif;\"><span style=\"color: #000000;\"> as provided for in the Chartered <\/span><\/span><\/span><span style=\"font-size: 12pt;\"><span style=\"font-family: 'Book Antiqua',serif;\"><span style=\"color: #000000;\"><strong>Accountants Act, 1949<\/strong><\/span><\/span><\/span><span style=\"font-size: 12pt;\"><span style=\"font-family: 'Book Antiqua',serif;\"><span style=\"color: #000000;\"> shall continue in respect of its members in general and specifically with <\/span><\/span><\/span><span style=\"font-size: 12pt;\"><span style=\"font-family: 'Book Antiqua',serif;\"><span style=\"color: #000000;\"><strong>respect to audits<\/strong><\/span><\/span><\/span><span style=\"font-size: 12pt;\"><span style=\"font-family: 'Book Antiqua',serif;\"><span style=\"color: #000000;\"> pertaining to private limited companies, and public unlisted companies.\u00a0<\/span><\/span><\/span><\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<p><span style=\"font-size: 12pt;\"><span style=\"font-family: 'Book Antiqua',serif;\"><span style=\"color: #000000;\">Source: <\/span><\/span><\/span><a style=\"text-decoration: none;\" href=\"https:\/\/economictimes.indiatimes.com\/news\/india\/government-appoints-ex-finance-secretary-ajay-bhushan-pandey-as-nfra-chief\/articleshow\/90132178.cms\" target=\"_blank\" rel=\"noopener\"><span style=\"font-size: 12pt;\"><span style=\"font-family: 'Book Antiqua',serif;\"><span style=\"color: #1155cc;\"><u>ET<\/u><\/span><\/span><\/span><\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>In News The government has appointed former finance secretary Ajay Bhushan Pandey as chairman of the National Financial Reporting Authority (NFRA) for a period of three years. National Financial Reporting Authority Regulatory Body: It is a regulatory body constituted by the Government of India under Sub Section (1) of section 132 of the Companies Act, [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":8306,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[21],"tags":[26,46],"class_list":["post-8305","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-current-affairs","tag-gs-3","tag-indian-economy-related-issues"],"acf":[],"jetpack_featured_media_url":"https:\/\/wp-images.nextias.com\/cdn-cgi\/image\/format=auto\/ca\/uploads\/2023\/07\/7013280Screenshot_6.png","_links":{"self":[{"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/posts\/8305","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/comments?post=8305"}],"version-history":[{"count":1,"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/posts\/8305\/revisions"}],"predecessor-version":[{"id":49234,"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/posts\/8305\/revisions\/49234"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/media\/8306"}],"wp:attachment":[{"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/media?parent=8305"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/categories?post=8305"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/tags?post=8305"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}