• The National Financial Reporting Authority (NFRA) will soon issue a circular outlining the frequently observed deviations in the preparation of financial statements and statutory audits to give guidance to managements and auditors on practices they should strictly avoid.

ABOUT NFRA

• It is the country’s sole independent audit regulator.
• NFRA was constituted in 2018 by the Government of India under section 132 (1) of the Companies Act, 2013.
• HQ- New Delhi
• It replaced the National Advisory Committee on Accounting Standards (“NACAS”).
• Objective- To continuously improve the quality of all corporate financial reporting in India.
• It comes under the purview of Ministry of Corporate Affairs.
• Composition includes a Chairperson, who is a Chartered Accountant and a person of eminence having expertise in accountancy, auditing, finance or law (appointed by the Central Government) and a maximum of 15 members.
• Functions and Duties
  • 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.
• Its account is monitored by the Comptroller and Auditor-General of India.