Tag Archives: Chartered Accountants

National Financial Reporting Authority (NFRA) and its Powers

Section 132 of the Companies Act, 2013 is the point of debate and hope for corporate governance. It paves way for constitution of National Financial Reporting Authority – a super-regulator for statutory auditors – Chartered Accountants. Optimists see it as predecessor of a future super-regulator for self regulatory statutory professional organizations – Institute of Chartered Accountants of India regulating chartered accountants and statutory auditors, Institute of Cost Accountants of India (earlier Institute of Cost and Works Accountants of India) regulating cost and management accountants and cost auditors, and Institute of Company Secretaries of India regulating company secretaries and secretarial auditors. We earlier discussed the provision of Section 132 earlier here.

In this post, we will discuss Section 132 and the National Financial Reporting Authority Rules, 2018 as on 13th November 2018.

In an earlier post here, we discussed Duties of NFRA under Section 132 and the National Financial Reporting Authority Rules, 2018 as on 13th November 2018. In this post, we will discuss powers of NFRA to investigate and disciplinary proceeding as on 13th November 2018.

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Quotes from Companies Bill debate in Rajya Sabha

UPDATE: on 30th August 2013: Companies Bill 2012 became the Companies Act, 2013 (Act 18 of 2013).

For every new law, legislative intent, which show it in debates taken place in Parliament, become important. These debates offer a guide while drafting subordinate legislation. There are many questions about future rules and regulations. I, here, compiled some important quotes from this debates from Rajya Sabha.[i][ii][iii]

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(UPDATE: on 30th August 2013: Companies Bill became the Companies Act, 2013 (Act 18 of 2013). Post updated accordingly)

One of the foremost step for improving corporate governance since birth of concept of corporate governance is improving quality of accounting and auditing of companies. Audit Committee is one of these measures, which has been taken to improve standard of financial reporting. But concerns related to quality of financial reporting are not new. We can trace these concerns in earlier legislation, all earlier versions of the Companies Act in general and the Chartered Accountants Act, 1949. Without going deep in these laws, we simply say; what was otherwise need to enact such Act to regulate a profession of accounting and auditing, standardizing whole process of accounting and auditing.

The National Financial Reporting Authority is a quasi – judicial body to regulate matters related to accounting and auditing. With increasing demand of non – financial reporting, I may safely predict, a National Business Reporting Authority to regulate standards of all kind of reporting, financial as well as non – financial, from companies in near future.

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Introducing: AishMGhrana Governance Professional

The Institute of Company Secretaries of India has its Continuing willingness to present itself as a world leader as professional body of Corporate Governance professionals. This is a welcome transformation of Company Secretary from a mere clerk to Corporate Governance professional. The ICSI said as a member of CSIA it will ask the World Trade Organization (WTO) to include corporate governance and related areas in its mode of business classification.

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In India, Company Secretary is a ‘more legal than finance’ profession under administrative control of Ministry of Corporate Affairs. The profession represents middle class of professions against Doctors, Lawyers and Public Accountants. Naturally, among its practitioners, there is a natural thrust to improve and update and not expertise in some particular fields. Same time, majority of its members represent economic middle class of society, where education is over emphasized constituent of life. Alas! Indian education system is not an education system at all but a degree distribution system, where we want to distribute degree to all and sundry without actually educating them. This is whole scenario, I want to discuss in detail here.

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The minister of corporate affairs Mr. Veerappa Moily  on 12th December 2011 moved 3 bills namely; the Chartered Accountants (Amendment) Bill, 2010, the Cost and Works  Accountants (Amendment) Bill, 2010 and the Company Secretaries (Amendment) Bill, 2010

These bills were to amend sub-section (2) of Section 2 of three Acts namely the Chartered Accountant Act, 1949, the Cost and Works Accountants Act, 1959 and the Company Secretaries Act, 1980.

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