The panel, whose recommendations were released for public comments, has suggested joint audits for certain classes of companies, apart from those specifically provided for under the law for forensic audits.
There are several recommendations related to strengthening National Financial Reporting Authority (NFRA), which was established after the collapse of IL&FS. NFRA has taken away some of the powers that were earlier vested in Institute of Chartered Accountants of India When it came to regulating CA and taking disciplinary action.
companies Act Provides a list of prohibited non-auditing service. But the committee has said that the list needs to be revisited so that conflict of interest is avoided and separate lists can be made for different categories of companies.
As reported by TOI on February 21, the ban is likely to be in the case of “public-interest companies” which are under the jurisdiction of the NFRA, having listed entities or turnover of Rs 1,000 crore or more than Rs 500 crore. includes debt. Apart from banks and insurance and power companies.
In order to strengthen the NFRA, the committee has suggested that the agency should be given powers to initiate action against chartered accountants or firms for non-compliance with the provisions of the Companies Act, which masquerade as “professional or other misconduct”. are not eligible. For example, about 11,000 auditors have not filed their annual returns as mandated by the NFRA.
It was also recommended that NFRA should initiate action in case of non-compliance of its orders. There are several suggestions for making the agency an independent regulatory body.
The government has been calling for tightening of rules and proposed amendments to the law in recent years, especially after the role of auditors in corporate scandals has come into question. These include providing a report in case of resignation and a standard format for auditability – which is seen as a step in that direction. Government is expected to pursue bill during monsoon or winter season Parliament To ensure that the Companies Act has been updated once again.