Body to monitor accounting & auditing

The government proposes to establish a National Financial Reporting Authority (NFRA) for better monitoring of corporate financial management, going by the revised Companies Bill, 2011. NFRA is, in fact, the renamed version of the earlier proposed National Advisory Committee on Accounting and Auditing Standards. Such an authority, says the Bill which the Cabinet cleared yesterday, will have the mandate to ensure scrutiny and compliance of accounting and auditing standards. It will also ascertain the quality of the service of professionals associated with the compliance. NFRA will have quasi-judicial powers. It can order investigation, levy penalty and bar professionals from practice in case of their indulgence in professional or other misconduct. The creation of this body may create a problem with the Institute of Chartered Accountants of India(ICAI), a senior expert associated with a leading CA firm pointed out on condition of anonymity.

Source : Business Standard