Icai not in favour of nfra

Others 829 views 5 replies

Sathish M

Management Accountant

40581 Points Joined June 2010

Showing signs of differences with the Corporate Affairs Ministry, accounting watchdog ICAI said the proposal to set up the National Financial Reporting Authority could create " two parallel regulators". The new Companies Bill, which is awaiting Rajya Sabha approval, has proposed setting up of NFRA for monitoring as well as ensure compliance of accounting and auditing norms. At present, Institute of Chartered Accountants of India ( ICAI) is the regulator for accounting and auditing issues.

" What is the need for bringing another regulator to get it enforced. Probably, there will be two regulators ICAI and NFRA... Our concern is that two parallel bodies would be looking at the auditing standards," ICAI President Subodh Kumar Agrawal said here. — PTI

Source:The Free press epaper

Replies (5)

Yuvraj Singh

CA FINAL

135 Points Joined November 2011

thanx for sharing...

CA Sanjay Bag

CHARTERED ACCOUNTANT

3350 Points Joined December 2011

Yes, I think the ICAI President Mr. Subodh Kumar Agarwal is right.

Ashish

166 Points Joined November 2009

ICAI

Ashish

166 Points Joined November 2009

According to Sachin Pilot, minister of corporate affairs (MCA), ICAI and NFRA will "co-exist". "It (NFRA) will be an overarching authority, with a larger canvas to operate," he told ET over telephone. "NFRA will be a nodal agency for financial reporting with quasi-judicial powers and the powers to suspend auditors." He added the division of work between ICAI and NFRA would be spelt out after the Companies Bill is passed in Parliament.

Notably, the NFRA will have the power to act against audit firms. This is a step up over the ICAI, which can suspend individuals, but not a firm. This separation is perceived to be a failing of the ICAI, as was exposed in recent cases of accounting frauds.

The bill says the NFRA will be headed by a person "of eminence and having expertise in accountancy, auditing, finance or law" and will be appointed by the Central government; there will be up to 15 full-time and part-time members.

Further, the chairperson and fulltime members cannot be associated with any audit firm (including related consultancy firms) during their tenure and till two years after demitting office. "We can have a mix of people from both government and private sectors in running these bodies," says Pilot.