The Ministry of Corporate Affairs ( MCA ) has recently notified that the decisions of the National Financial Reporting Authority ( NFRA ) would not be affected merely on the ground of procedural irregularities.
According to a notification issued by the Ministry, “No act or proceeding of the Authority shall be invalid merely by reason of any irregularities in the procedure of the Authority not affecting the merits of the case.”
It also said that in certain circumstances, the chairperson may, for reasons to be recorded in writing, determine the procedure in a particular case.
Recently, a former bureaucrat, Rangachari Sridharan, was appointed NFRA chairman. According to the government, NFRA will look into cases of listed companies and ICAI’s role will be confined to private limited or unlisted public companies below a threshold, yet to be decided. ICAI will also remain an institution to certify and register all accounting professionals.
Further, ICAI will continue to play its earlier advisory role with respect to accounting and auditing standards, as well as policies, but by making its recommendations to NFRA. NFRA may recommend penal action against auditors if found non-compliant with the rules or if for lapses in duties. Also, there were reports that the 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.
The NFRA Rules mandated that every auditor shall file a return with the Authority on or before 30th April every year in such form as may be specified by the Central Government.
The authority shall receive recommendations from the ICAI on proposals for new accounting standards or auditing standards or for amendments to existing accounting standards or auditing standards.
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