Statutory auditors get a breather on NFRA-2 form

Statutory auditors have been given more time to file their form NFRA-2 — which specifies the format of annual return — for financial year 2018-19 with the National Financial Reporting Authority (NFRA), the independent audit regulator.

They can now file this form within 150 days from the date of its publication on NFRA’s website i.e., 150 days from December 9, when it was published on website.

It may be recalled that the corporate affairs ministry (MCA) had, in December last year, given a breather for statutory auditors who were earlier required to file the NFRA-2 form with NFRA by November 30.

It had then said that the form NFRA-2 could be filed with NFRA within 90 days from the day on which it was published on the website of the authority.

This meant that auditors had time till March 9 to file the comprehensive annual return for 2018-19. Now, this time limit has been extended by two more months — by May 9, this form has to be filed.

One of the reasons for extending the timeline in November 2019 was that the NFRA came up with the format very late and closer to the November 30 deadline. As the information sought was quite extensive, more time was required and representations were made to the MCA to extend the last date of filing, sources said. Even with the revised deadline of March 9, auditors are not able to provide comprehensive information that is sought to be obtained by the regulator.

So, after some representation again, the last date is being extended by another 60 days, they said.

Experts’ take

Amarjit Chopra, former CA Institute President, said that the move is “desirable” as there is a need to come up with responses for a lot of frequently asked questions (FAQs) on the details sought in the NFRA-2 form.

“There are issues in the form which probably members (of CA Institute) need to understand and I think the authorities concerned will come up with some FAQs in the immediate to near future,” Chopra told BuisnessLine.

Ashok Haldia, former Secretary of CA Institute, said he would not be surprised if the date for submission is extended further as the details called for by the NFRA are both extensive and intensive.

This would, however, delay creation of a database at the NFRA, and by extension, hamper taking preventive as well as corrective measures for improving the quality of audit, he said.