Auditing of companies has improved in last 3-4 yrs: NFRA Chairperson
The Chairperson of National Financial Reporting Authority (NFRA), Dr. Ajay Bhushan Pandey recently expressed his views on audit quality of Indian Companies. As per him, Auditing of companies have improved in the last three to four years and highlighted the need for board as well as audit committee members to engage with auditors which will help in raising red flags and prevent possible corporate failures. NFRA, constituted in October 2018 under the companies act, has passed more than 80 orders, including in Cafe Coffee Day, DHFL and a few other large cases, for lapses that led to corporate failures. He noted that there is a certain section among the auditors and among the board members who were not that sensitive and alert due to which there have been many corporate failures. People should be aware that these are the pitfalls and they have responsibilities.
In many of the cases that the NFRA has dealt with, he said it was noticed that audit committees did not engage with auditors and did not ask the right questions to the auditors.
The regulator along with the Indian Institute of Corporate Affairs (IICA) is planning to launch some courses for upgradation of knowledge of auditors who will be auditing large listed companies.
