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If you thought the National Financial Reporting Authority (NFRA) had gone off the radar of the Union Government, think again.
Setting up the NFRA very much forms part of the Corporate Affairs Ministry’s key agenda for the current fiscal, a top official said.
Under the new company law, NFRA has been proposed as a quasi judicial body to oversee the quality of financial reporting and also act as a disciplinary authority for chartered accountants.
The auditing fraternity’s excitement that NFRA provision in the new company law had not been implemented although nearly 283 sections of the new law had come into force may be short-lived.
“During 2014-15, the Ministry intends to set up several new bodies envisaged under the new company law such as NFRA, Investor Education & Protection Fund, registered valuers as well as notifying an appropriate agency to create and maintain a databank for independent directors. An early decision will be taken by the Ministry on all these issues,” MJ Joseph, Additional Secretary in the Corporate Affairs Ministry, said at a national conference on corporate governance, organised by PHD Chamber of Commerce and Industry here on Thursday.
The setting up of NFRA would be a body-blow to the CA Institute which faces the prospect of losing regulatory hold over its members.
Also, the new quasi-judicial body would take over the role of recommending auditing standards, which are currently the preserve of the CA Institute.
NCLT delayed The important matter of national company law tribunal (NCLT) and its appellate body National Company Law Appellate Tribunal (NCLAT) is currently before the Supreme Court due to a legal challenge, Joseph said.
“After a final decision is pronounced, the Ministry would take necessary action to establish the required numbers of Benches at different locations of the country. This process may take more than a year for its completion,” he said.
NCLT is a significant component of the new company law framework.
Most of the remaining 187 sections that are to be notified in the new company law are linked to the functioning of NCLT, say company law experts.
As many as 283 Sections out of the total 470 Sections in the new company law have come into force from April 1.
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