Quick Summary
In a crucial development impacting India's audit and accounting sector, the Supreme Court (SC) has permitted the National Financial Reporting Authority (NFRA) to proceed with disciplinary cases against chartered accountants (CAs) and audit firms even where no Audit Quality Review Reports (AQRRs) have been prepared and final orders are yet to be passed. However, a bench comprising Chief Justice Sanjiv Khanna and Justice Sanjay Kumar has directed that NFRA must not issue final orders in these cas
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FAQ :
Yes, the Supreme Court has allowed the NFRA to continue with disciplinary cases against chartered accountants and audit firms.
No, the Supreme Court has directed that the NFRA must not issue final orders in these cases for the time being.
Any final orders that have already been passed by the NFRA will not be given effect until further directives from the Supreme Court.
The Supreme Court's involvement was due to NFRA's appeal against a Delhi High Court order that had raised concerns about NFRA's structure for separating audit quality reviews from disciplinary actions.
A key case mentioned is the proceedings against the auditor of Dewan Housing Finance Corporation Ltd. (DHFL), where a large financial fraud is under investigation.
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