Q: What is the NFRA?
A: The National Financial Reporting Authority is a regulatory body in India tasked with overseeing the quality of financial reporting by companies to ensure transparency and accuracy in corporate financial statements.
Q: When was the NFRA established?
A: The NFRA was constituted on October 1, 2018.
Q: Under which law was the NFRA set up?
A: It was set up under Section 132(1) of the Companies Act, 2013.
Q: Why was the NFRA created?
A: It was created to establish and enforce accounting and auditing standards and oversee the quality of service of the professions associated with ensuring compliance with such standards, to protect public interest and investor interests.
Q: What is the scope of the NFRA's authority?
A: The NFRA has a broad scope, including the authority to investigate matters of professional or other misconduct and to impose sanctions.
The National Financial Reporting Authority (NFRA) and the Institute of Cost and Works Accountants of India (ICWAI), now known as the Institute of Chartered Accountants of India (ICAI), both play roles in the financial reporting landscape of India. The NFRA, being an independent body, is responsible for setting and enforcing accounting and auditing standards, which the members of the ICAI, as professional accountants, are required to follow. The relationship between the two can be seen as that of a regulator (NFRA) and practitioners (members of the ICAI) within the financial reporting and auditing space.
Q: What is the connection between NFRA and ICAI?
A: The National Financial Reporting Authority (NFRA) oversees the quality of financial reporting and sets auditing standards which the Institute of Chartered Accountants of India (ICAI) members, as certified professionals, must adhere to in their practice.
Q: Does NFRA regulate the members of ICAI?
A: Yes, NFRA has the authority to regulate accountants, which includes members of the ICAI, particularly in their roles related to financial reporting and auditing.
Q: Can NFRA take disciplinary action against ICAI members?
A: NFRA has the power to investigate and take action against professional misconduct, which can extend to members of the ICAI if it pertains to financial reporting or auditing standards.
Q: How do NFRA and ICAI collaborate?
A: While NFRA is a regulatory authority, ICAI is a professional body, and they collaborate to ensure that accounting and auditing practices in India meet high-quality standards and are in the public interest.