The Government had decided to set up a new agency called National Financial Reporting Authority (NFRA) in order to create revolutionary changes in the poor disciplinary record of Institute of Chartered Accountants of India.
Though the Companies Act, 2013 under section 132, provides for the establishment of National Financial Reporting Authority, the provision has not been implemented yet.
The laws provide the power for NFRA to an overlook into the professional matters including the improper behavior of professionals and also suspends CAs and firms from practicing for six months-to-10 years and the agency would take away several powers that currently vested with ICAI.
The issue had been on the backburner for the last few years but is now simmering again after Prime Minister Narendra Modi publicly aired his criticism over ICAI’s disciplinary record -a charge that the institute is now trying to cope with. At the CA Day event on July 1, Modi had said that just around 25 auditors had faced action in over a decade and around 1,400 cases were pending.
Reports said that for the Government, it may be neither feasible nor prudent to allow NFRA to look at all companies and in the initial phase may task it with handling listed companies only.
Reportedly, in the light of the alleged involvement of Chartered Accountants in the Punjab National Bank (PNB) fraud, the Government may soon notify NFRA.
