The Ministry of Corporate Affairs (MCA) has notified that the newly constituted National Financial Reporting Authority ( NFRA ) can investigate the matters relating to misconduct of Chartered Accountants from 24th October 2018.
“In exercise of the powers conferred by sub-section (3) of section 1 of the Companies Act, 2013 (18 of 2013), the Central Government hereby appoints the 24th October, 2018 as the date on which the sub-sections (2), (4), (5), (10), (13), (14) and (15) of section 132 of the said Act shall come into force,” MCA Notification said.
Earlier this month, the Central Government has notified the constitution of the NFRA, a new regulatory for the auditors in the country.
NFRA would have power to suo motu investigate the auditor and also to punish him for misconduct and remove his name from the register maintained by ICAI. In addition, the authority will also have the power to penalise any member or firm of chartered accountants.
Following this, the Delhi High Court, in a petition filed by the Northern India CA Federation, had granted an interim relief by staying the proceedings of the NFRA.
The petitioners urged that this would lead to a situation where the auditors would not be able to perform/discharge their function, duties and responsibilities as auditors under the Companies Act fairly, truthfully and independently.
Also, there were reports that the Institute of Chartered Accountants of India (ICAI), the apex Chartered Accountants body in India, has expressed displeasure with the government for not including it in discussions to frame rules for the new regulator for auditors.Subscribe Taxscan AdFree to view the Judgment