NFRA eyes larger role, wants to be regulator for entire gamut of financial reporting

Posted on 16th Sep 2021

Audit regulator makes public its conclusions on questions posed in its June consultation paper
Audit regulator National Financial Reporting Authority (NFRA) wants to be positioned as a regulator for the entire gamut of financial reporting, covering all processes and participants in the financial reporting chain.

Towards this end, NFRA has “requested” its Technical Advisory Committee (TAC) to come up with draft proposals in this regard.

This has been revealed as part of one of the conclusions made by NFRA to the 19 specific questions arising from the recommendations of the TAC report of March 2021, which formed the basis of a consultation paper issued by the audit regulator in June.

TAC recommendation
This aspiration to be a regulator for the entire gamut of financial reporting formed part of conclusion on a TAC recommendation to introduce a policy on settlement of disciplinary matters against auditors.

It maybe recalled that the TAC had recommended that the NFRA examine the desirability and feasibility of a policy on settlement of disciplinary matters.

Responding to this suggestion, NFRA has now concluded that the introduction of a settlement mechanism is only one aspect of a whole raft of changes that need to be brought about in the law, to more properly define NFRA’s remit, and to provide it with the requisite functional, financial and administrative autonomy for being an effective regulator.

“NFRA needs to be positioned as a regulator for the entire gamut of financial reporting, covering all processes and participants in the financial reporting chain,” the NFRA conclusion said.

NFRA on Monday made public its conclusions on the questions posed in its consultation paper on TAC report on Enhancing Engagement with Stakeholders. NFRA had requested for comments on a total of 19 specific questions arising from the recommendations of the TAC report.

The comment period for this consultation paper ended on June 30 this year. NFRA has received 17 comment letters from stakeholders such as important industry bodies, large accounting firms and research /academia.

By: KR Srivats