Audit Regulator Falls Silent: Why has NFRA Not Released any Disciplinary Orders Since February?
While NFRA has said that it continues to monitor auditors closely, the fact remains that the authority has not released any orders in the past ten months, which itself shows that there is some delay in the enforcement actions.
The National Financial Reporting Authority ( NFRA ), India’s auditing regulator has not issued a single disciplinary action for the last 10 months, with its latest publicly published order dating back to February.
This extended silence has raised questions who closely track NFRA’s enforcement actions as indicators of regulatory oversight standards in the auditing ecosystem.
As per available reports, NFRA released orders only in January 2025, and since then, no new orders including those relating to debarments have been issued.
Previously, NFRA has been active in disciplinaryactions. Between 2022 and 2025, it has debarred and imposed monetary penalties on 103 Chartered Accountants. Of these, 85 CAs have been debarred for periods ranging from six months to ten years, depending on the seriousness of the audit lapses. The regulatory body's investigations showed serious professional misconduct, which led to the imposition of these penalties.
According to past NFRA decisions, numerous engagement partners were found guilty of failing to exercise necessary care and diligence, particularly in checking being in line with Section 139 of the Companies Act, which governs the appointment of auditors. Such errors, discovered during investigations, constituted the foundation for harsh debarment and sanctions.
However, the sudden ten-month silence in front of previously regular inspections has led to discussion over the root cause of the regulatory delay and the implications for audit accountability.
In an interview of February, 2025 with The Economic Times, NFRA Chairman Ajay Bhushan Pandey revealed that the authority will soon select accountancy firms auditing listed companies for the upcoming round of inspections. He also stated the use of data analytics in identifying firms based on their impact on the audit network.
While NFRA has said that it continues to monitor auditors closely, the fact remains that the authority has not released any orders in the past ten months, which itself shows that there is some delay in the enforcement actions.
Reasons Anticipated for the Delay
There are no stated reasons for NFRA’s long delay in issuing enforcement actions. The holdup could come from multiple causes, such as manpower constraints or procedural delays in completing investigations. A more improbable reason would be the absence of any audit failures, a belief that is in contradiction with the realities of the system.
Regardless of the reason, the regulator body's silence is not the best way to preserve trust in regulatory vigilance and audit enforcement.
About NFRA
NFRA, the country’s independent audit regulator and responsible for investigating professional misconduct by auditors and improving the quality of financial reporting. The body releases disciplinary orders at regular intervals, especially in cases involving listed entities, large companies, and audit failures. However, the current gap marks one of its longest periods without proper actions.
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