Quick Summary
The auditing landscape in India has seen significant improvement over the past three to four years, according to Ajay Bhushan Prasad Pandey, Chairperson of the National Financial Reporting Authority (NFRA). Emphasizing the importance of collaboration between auditors, board members, and audit committees, Pandey underlined that active engagement is essential for identifying red flags and preventing corporate failures. Enhanced Oversight and Accountability Since its establishment in October 2018
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FAQ :
Yes, according to NFRA Chairperson Ajay Bhushan Prasad Pandey, Indian company auditing has seen significant improvements over the past three to four years.
The NFRA, or National Financial Reporting Authority, was established in October 2018 under the Companies Act to oversee auditing and accounting standards in India.
Key areas for improvement include enhancing two-way communication between auditors and those charged with governance (like audit committees), and increasing sensitivity and accountability among auditors and board members.
The NFRA is issuing orders against lapses, sensitising auditors and board members, and collaborating with the Indian Institute of Corporate Affairs (IICA) to launch capacity-building courses for audit committee members and auditors.
Investigations into cases like DHFL and Café Coffee Day show that systemic failures occurred when auditors repeatedly overlooked critical issues, highlighting the need for early red flag identification.
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