Taxation

National Financial Reporting Authority may not be legally valid, says auditor body

The Institute of Chartered Accountants of India (ICAI) has said that the National Financial Reporting Authority (NFRA) to discipline CAs and firms auditing listed and large companies may not be in line with the current regulations and suggested that the task should be left to the self-regulating body. We are willing to implement any reform. We have been honestly discharging our duties under supervision by the government and with government nominees being integral part of the disciplinary process, ICAI president Naveen Gupta told reporters on Monday. Gupta said legal opinion from advocate Mukul Rohatgi suggested that the establishment of NFRA is not constitutionally valid and it encroaches upon the powers of ICAI. The former attorney general has said the CA Act does have precedence over provisions of the Companies Act 2013. While around 1,300 cases were currently pending disciplinary action, including 135 complaints filed by government agencies, Gupta said the speed has picked up in recent years. We have been fastest in taking action, acknowledging what’s happening and most of the times, acting suo motu, he said, adding that cases, that were pending for nearly 15 years, have also been decided. The government is, however, not fully satisfied with the agency’s response and is cut up with it for trying to scuttle the establishment of NFRA.

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