The Ministry of Corporate Affairs (MCA) notified the constitution of the National Financial Reporting Authority (NFRA) on 1 October 2018. NFRA is mandated to act as an independent regulator for the accounting and auditing profession. NFRA is composed of 13 members – one chairperson, three full-time members and nine part-time members – in accordance with the National Financial Reporting Authority (Manner of Appointment and Other Terms and Conditions of Service of Chairperson and Members) Rules, 2018, notified in March. The members of NFRA are appointed by a combination of the central government and a search-cum-selection committee constituted under the rules.
In a series of notifications published in the official gazette of India on 22 March 2018, 3 October 2018 and 24 October 2018, the MCA also notified all the existing sub-sections of section 132 (Constitution of National Financial Reporting Authority) of the Companies Act, 2013. The powers and functions of this independent institution are as follows:
- NFRA is empowered to and tasked with (i) making recommendations to the government on the formulation of accounting and auditing policies and standards; (ii) monitoring and enforcing the aforementioned standards; and (iii) suggesting measures for improving the quality of service of the accounting and auditing profession.
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The business law digest is compiled by Nishith Desai Associates (NDA). NDA is a research-based international law firm with offices in Mumbai, New Delhi, Bengaluru, Singapore, Silicon Valley, Munich and New York. It specializes in strategic legal, regulatory and tax advice coupled with industry expertise in an integrated manner.
