The Parliamentary Standing Committee on Finance which examined the Companies Bill, 2009 and the Companies Bill, 2011 had recommended that the National Advisory Committee on Accounting and Auditing Standards (NACAAS), proposed in the Companies Bill, 2009, be institutionalized not only as a body for setting up auditing standards but also as a quasi-regulatory body for generally supervising the quality of audit undertaken. Giving this information in written reply to a question in the Rajya Sabha, Shri Sachin Pilot, Minister of Corporate Affairs, said that keeping in view the recommendation, the provisions of clause 132 of the Companies Bill, 2011 provides for constitution of National Financial Reporting Authority (NFRA) to (i) make recommendations on the formulation and laying down of accounting and auditing policies and standards; (ii) monitor and enforce the compliance with such standards; (iii) oversee the quality of service of the relevant professions and suggest measures required thereto and (iv) take necessary action in certain cases against professional misconduct against chartered accountants.
Shri Pilot also informed the House that a report titled “Corporate Governance in India from Policies to Reality” brought out by Indian Institute of Corporate Affairs (IICA) recommends an independent regulator for auditors.
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