National Financial Reporting Authority (NFRA)

• The National Company Law Appellate Tribunal (NCLAT) has ruled in a judgment that the National Financial Reporting Authority (NFRA) has superior and overriding powers over the Institute of Chartered Accountants of India (ICAI) in matters relating to professional misconduct of chartered accountants (CAs).

 ABOUT NATIONAL FINANCIAL REPORTING AUTHORITY (NFRA)

• The NFRA was constituted in 2018, by the Government of India under the Companies Act, 2013.
• It is an independent regulator to oversee the auditing profession and accounting standards in India.
• It aims to continuously improve the quality of all corporate financial reporting in India.
• Headquarters- New Delhi
• Nodal Ministry– Ministry of Corporate Affairs
• Roles and functions
  • For the Central Government’s approval, NFRA will recommend accounting and auditing policies and standards businesses should embrace.
  • It will monitor and enforce adherence to the accounting and auditing standards.
  • It will monitor the professions’ adherence to these standards and the quality of their work and make recommendations for ways to raise service quality.
  • It will carry out any additional tasks or obligations required for or related to the tasks above and obligations.
• It consists of a chairperson, who shall be a person of eminence and having expertise in accountancy, auditing, finance, or law to be appointed by the Central Government and such other members not exceeding fifteen consisting of part-time and full-time members.
• NFRA have the power to investigate, either suo moto or on a reference made to it by the Central Government into the matters of professional or other misconduct committed by any member or firm of chartered accountants registered under the Chartered Accountants Act, 1949.
• It has the same powers as are vested in a civil court under the Code of Civil Procedure, 1908 while trying a suit.