Macro@Moneycontrol: NFRA to soon take over regulatory reins from ICAI-NEW-ONE熱點

Macro@Moneycontrol: NFRA to soon take over regulatory reins from ICAI

作者:Nancy    發表日期:2018-03-13 20:46:11

The Union Cabinet has approved the setting up of independent regulator National Financial Reporting Authority (NFRA), aimed at taking over the regulatory responsibilities of the Institute of Chartered Accountants of India (ICAI).

In Macro@Moneycontrol, we attempt to explain the role of the new regulator and the powers it shall have over the ICAI going forward.

The ICAI currently serves as the self-regulatory body for accounting in India. In light of the increased number of scams surfacing over the last couple of decades, there have been multiple calls for the redefinition of ICAI’s role as a regulator and the setting up of a new regulator.

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In the past, despite their integral role in each of these scams, auditors have never been pulled up to the extent they should have been. After the NFRA is set up, it will act as a deterrent for errant auditors because unlike earlier, there will be someone actively looking only for discrepancies in accounting practices.

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Although there are concerns that the establishment of NFRA will render ICAI powerless, the government has reiterated that ICAI’s role is quite well-defined and that the only thing NFRA will take away from it will be the power to penalize its members.

On the other hand, ICAI will still have control over its educational operations, thereby making sure that it can groom young, upcoming accountants to avoid similar errors on their part in the future.

The setting up of the NFRA can only take place once there is a legislation on it. The bill is expected to be introduced and passed in Parliament in the next three weeks. Important details like what will be the minimum size of a company for it to come under the ambit of the NFRA are still to be decided.