NFRA to conduct annual inspection of major audit firms: NFRA Chief
The National Financial Reporting Authority (NFRA) is planning to conduct annual inspections of major audit firms to ensure compliance with standards and protect investors.
As per the NFRA Chairperson, the annual inspection of major audit firms planned by the National Financial Reporting Authority (NFRA) will help bolster compliance with auditing standards and protect the interests of investors and shareholders. As per section 132 of the Companies Act, the NFRA has the responsibility and obligation of monitoring and enforcing the compliance of accounting and auditing standards. These inspections are an exercise to fulfil that mandate. Also, inspection is a regular feature of major audit regulators across jurisdictions, including the US, the UK, Canada and Australia. Moreover, thanks to the massive growth in digital public infrastructure in recent years, millions of small and retail investors, in addition to the big domestic and foreign ones, are putting their money in the capital market. It is very essential to protect their interests and enhance trust in financial reporting of companies. NFRA is also planning to hold talks with the audit committees and independent directors of listed firms as Audit committees and boards have a crucial role in preparation of financial statements and ensuring that these represent a true and fair view of the companies.
