Context: The audit regulator, National Financial Reporting Authority (NFRA), has recently constituted a Technical Advisory Committee (TAC).
More about the Technical Advisory Committee (TAC)
- It comprises seven members, including the Chairman.
- Chairman: R Narayanaswamy, Professor, Indian Institute of Management, Bengaluru.
- To aid and advise the Executive Body of the NFRA on issues related to the drafts of accounting standards and auditing standards.
- It will also provide inputs from the perspectives of users, preparers, and auditors of financial statements.
- The terms of reference(ToR)
- Advice on the development of measures of audit quality;
- Advice on suitable methods for promoting awareness -
- Relating to compliance with accounting and auditing standards
- Of the role of the NFRA in protecting investors through independent auditor regulation.
About National Financial Reporting Authority (NFRA)
- It was constituted under section 132 (1) of the Companies Act, 2013.
- Earlier, the Union Cabinet on March 1, 2018, approved the creation of a National Financial Reporting Authority (NFRA) as an independent regulator for the auditing profession, in an attempt to tighten regulatory oversight over chartered accountants and plug loopholes.
- The Companies Act requires the NFRA to have a chairperson who will be appointed by the Central Government and a maximum of 15 members.
- Functions and Duties:
- Recommend accounting and auditing policies and standards to be adopted by companies for approval by the Central Government;
- Monitor and enforce compliance with accounting standards and auditing standards;
- Oversee the quality of service of the professions associated with ensuring compliance with such standards and suggest measures for improvement in the quality of service;
- Perform such other functions and duties as may be necessary or incidental to the aforesaid functions and duties.
- It can probe listed companies and those unlisted public companies having paid-up capital of no less than Rs 500 crore or annual turnover of no less than Rs 1,000 crore.
- It can investigate professional misconduct committed by members of the Institute of Chartered Accountants of India (ICAI) for the prescribed class of body corporate or persons.
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