ICAI has formed a special group to interact with the Government on a day-to-day basis for the formation of the National Financial Reporting Authority (NFRA) Rules.
NFRA Vs ICAI:
Was Our ICAI Leadership played a Proactive Role to Save Autonomy of the ICAI?
Ministry of Corporate Affairs has notified relevant sections to give effect to NFRA by way of notification on the 24th of October,2018.
Below are the few points and critical aspects that you need to know about NFRA:
- Till now ICAI used to make recommendations to the Central Government on the formulation and laying down of accounting and auditing policies and standards but, from now onwards ICAI will act as advisory to NFRA and NFRA will recommend to the Government
- NFRA has the power to investigate, either suo-motu or on a reference made to it by the Central Government, for such class of bodies corporate or persons, in such manner as may be prescribed into the matters of professional or other misconduct committed by any member or firm of chartered accountants,And no other institute or body shall initiate or continue any proceedings in such matters of misconduct where the National Financial Reporting Authority has initiated an investigation.So, ICAI cannot interfere where NFRA has issued proceedings
- NFRA have the same powers as are vested in a civil court
- And the most critical one comes here, PENALTY
Where professional or other misconduct is proved:
- NFRA may impose one lakh rupees – five times of the fees received, in case of individuals
- Ten lakh rupees -Ten times of the fees received, in case of firms
- Debarring the member or the firm from Practice 6 months – 10 years