Context:
Shri Nitin Gupta (Retd. IRS), former Chairman of the Central Board of Direct Taxes (CBDT), has been appointed as the new Chairperson of the National Financial Reporting Authority (NFRA) — India’s apex independent regulator for accounting and auditing standards.
About National Financial Reporting Authority (NFRA)
What is NFRA?
NFRA is a statutory body under the Ministry of Corporate Affairs (MCA), tasked with overseeing and enhancing the quality, credibility, and transparency of financial reporting and auditing practices in India.
- Constituted on: 1st October 2018
- Legal Backing: Section 132(1), Companies Act, 2013
- Headquarters: New Delhi
Objectives and Mandate
- Regulate and enforce compliance with accounting/auditing standards.
- Recommend accounting and auditing policies and best practices.
- Monitor audit quality and suggest systemic improvements.
- Investigate professional misconduct of auditors.
- Safeguard public and investor interest through credible disclosures.
Who Falls Under NFRA?
NFRA regulates auditors and auditing for:
- All listed companies (Indian and foreign stock exchanges).
- Unlisted public companies meeting any of the following:
- Paid-up capital ≥ ₹500 crore
- Turnover ≥ ₹1,000 crore
- Outstanding loans/deposits/debentures ≥ ₹500 crore
- Insurance companies, banks, power companies, and entities under special Acts.
- Foreign subsidiaries or associates of Indian companies contributing ≥ 20% of consolidated income/net worth.
- Any company or entity referred by the Central Government in the public interest.
