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Government plans new agency to spy Chartered Accountants Latest News

Monday, July 24 2017
Government plans new agency to spy Chartered Accountants

Government plans new agency to spy Chartered Accountants

The Government is reviewing plans to put in place the National Financial Reporting Authority (NFRA) as it seeks to rein in the Institute of Chartered Accounts for India (ICAI) for its perceived failure in enforcing discipline.

While Companies Act 2013 had provided for NFRA as a regulatory agency for audit, accounts and financial reporting, Section 132 of the law has remained on the papers as the rules are yet to be notified.

The new agency which can have up to 15 members, including the chairman-is mandated to advise on issues related to audit and accounting standards and be the regular for the profession.

The law provides for NFRA to look into matters of professional or other misconduct and also suspend CAs and firms from practicing for 6 months to 10 years.

Sources confirmed that various options were being considered for the agency and mechanism for appeal was also being considered.

This also comes at the time when ICAI is pushing to revise joint audit of Indian Companies after its plea for a mechanism was rejected by a Committee headed by Former Competition Commission of India Chairman Ashok Chawla in a report to the Prime Minister’s office.

The issue had been on the backburner for the last few years but is now simmering again after PM Narendra Modi publicly aired his criticism over ICAI’s disciplinary record- a charge that the institute is now trying to cope with.

He also added during the event that just around 25 auditors had faced action in over a decade and around 1,400 cases were pending. ICAI is expected to fix the issue shortly, but that has not stopped the Government from reopening the case for NFRA.

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Chartered Accountants (ca), Indian Institute Of Chartered Accountants For India (icai), National Financial Reporting Authority (nfra), Prime Minister, Narendra Modi
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