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, National Financial Reporting Authority ( NFRA ).
In a letter to the Ministry of Corporate Affairs, the ICAI had stated that even the appointment of the chairman of the NFRA came to its knowledge from media reports.
The letter, points out the ICAI’s displeasure over the stand taken by the government on setting up of NFRA. The ignorance was despite assurances that it will be included in discussions on NFRA, has been dismissive.
Recently, a former bureaucrat – Rangachari Sridharan – was appointed NFRA chairman. The appointment was made after a search committee rejected all the 200 candidates who were in the fray, sources said.
NFRA can investigate, either suo motu or if there is a reference made to it by the government, according to the rules released by ministry of corporate affairs. In addition, the authority will also have the power to penalise any member or firm of chartered accountants.
A fine up to Rs one lakh can be imposed on individuals, and it can be extended to five times of the fees received. For firms, the penalty amount will be Rs 10 lakhs, which can be extended to ten times of the fees received. According to the rules, the authority can also debar the firm engaging in practice as member of the Institute of Chartered Accountant of India (ICAI).
The inherent regulatory role of ICAI will continue, especially with respect to audits pertaining to private and public unlisted companies’ rules. It will continue with its advisory role on accounting and auditing standards by making its recommendations to NFRA.
The ICAI will also remain an institution that will give away certificates to accounting professionals.
Further, the ICAI will continue to play an advisory role with respect to accounting and auditing standards as well as policies, by making its recommendations to NFRA.
