Everybody is acclaiming that constitution of National Financial Reporting Authority (NFRA) will make professionals more responsible towards wrongdoing. They will bring more stringent rules and policies. They will have the last word on accounting and auditing standards, monitor compliance and investigate complaints against firms. However in my view it may help the small scale firms to grow further and bring better and improved relationship/networking amongst the professionals. How? Let's see!
For a new and small firm to get clients initially is difficult hence they normally make tie-up with lager one to share the work. Also there is restriction on the number of audits. Now these small CA firms may ask more details about the client before signing the audit report. It will help them to understand the hidden facts about the client and bring more disclosures on the board. Additional due diligence will bring more transparency and help to bring down amount of frauds and also give more clear picture of business before the shareholders.
Therefore implementation of NFRA may help at least small firms to convince the other firms (who have access to a large pool of clients) to share more revenue while getting signed the Audit Report from them. This will bring more and strong relationship between the firms. Also when all the firms would be on same parlance, chance of strong networking in between may persist.
Now even before implementation of NFRA if all newly practicing CA and small firms come together and take a vow that we will not sign the BS at all until and unless Audit is done us, definitely we may maintain our reputation and bring some change in the system. Also where we sign the Audit Report ask for more details and do at least fare due diligence. It will improve the quality of audit and check on non-compliances. However one person can’t bring this change. We all should come together to save our profession.
Even we should request to our newly formed council to appeal before CAG and other platforms to make it compulsory that a combo of one or two small firms and one large firm should audit the accounts. It will at least help us to grow together and bring more learning.
“Believe You Can Succeed and You Will”