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National Financial Reporting Authority
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- The story: India's NFRA - National Financial Reporting Authority - is in the process of creating a verified and accurate database of companies (Public Interest Entities) and auditors that come under the regulatory ambit of it.
- Details: In this regard, the NFRA has been engaging with the Corporate Data Management (CDM) division of the Ministry of Corporate Affairs (MCA) and three recognised stock exchanges in India.
- Constitution - The NFRA was constituted in 2018 by the Government of India under section 132 (1) of the Companies Act, 2013. It is an audit regulator. Its account is monitored by the Comptroller and Auditor-General of India. It is headquartered in New Delhi.
- Why - The decision to constitute the NFRA was taken after the role of auditors and the Institute of Chartered Accountants of India came under the scanner for alleged lapses in various corporate scams including that at the Punjab National Bank.
- Structure - It consists of a chairperson, who shall be a person of eminence and having expertise in accountancy, auditing, finance or law, appointed by the Central Government and such other members not exceeding 15.
- Functions - It recommends accounting and auditing policies and standards to be adopted by companies for approval by the Central Government. It monitors and enforces compliance with accounting standards and auditing standards. It oversees the quality of service of the professions associated with ensuring compliance with such standards and suggest measures for improvement in the quality of service.
- Powers: It can undertake investigation related to the following class of companies and bodies corporate called Public Interest Entities: Companies whose securities are listed on any stock exchange in India or outside India. Unlisted public companies having paid-up capital of not less than Rs. 500 crores or having annual turnover of not less than Rs. 1,000 crores or having, in aggregate, outstanding loans, debentures and deposits of not less than Rs. 500 crores as on the 31st March of immediately preceding financial year. Insurance companies, banking companies, companies engaged in the generation or supply of electricity. Where professional or other misconduct is proved, it has the power to make order for imposing penalty of — not less than one lakh rupees, but which may extend to five times of the fees received, in case of individuals; and not less than ten lakh rupees, but which may extend to ten times of the fees received, in case of firms.
- Knowledge centre:
- CAG - The Comptroller and Auditor General (CAG) of India is an authority instituted vide Article 148 of the Constitution of India. He or she is the head of Indian Audit and Accounts Department, and is responsible for safeguarding the public exchequer. The Indian Audit and Accounts Service aids the CAG in the discharge of his/her functions. V. Narahari Rao, a former civil servant was the first CAG who remained in his office from 1948 to 1954. In recognition of his significant contributions to the civil service in India, the government of India awarded him the highest civilian award namely Padma Bhushan in the year 1954. The present CAG is G.C. Murmu (14th CAG).
- CGA - The Controller General of Accounts (CGA), in the Department of Expenditure, Ministry of Finance, is the Principal Accounting Adviser to Government of India and is responsible for establishing and maintaining a technically sound Management Accounting System. The present CGA is Ms. Soma Roy Burman.
- SEBI - The Securities and Exchange Board of India (SEBI) is the leading regulator securities markets in India, analogous just like the Securities and Exchange Commission (SEC) in the U.S. SEBI has wide-ranging regulatory, investigative, and enforcement powers, including the ability to impose fines on violators. It is a statutory body, established on the 12th of April, 1992. Present chairperson is Ajay Tyagi.
- ICAI - The Institute of Chartered Accountants of India set up by an act of parliament. ICAI was established under the Chartered Accountants Act, 1949. The ICAI is responsible and accountable for setting the Standards on Auditing (SAs) to be followed in the audit of financial statements in India. Members of the Institute are known as Chartered Accountants (either Fellow or Associate). However, the word chartered does not refer to or flow from any Royal Charter.
- FSDC - The Financial Stability and Development Council is a non-statutory apex council under the Ministry of Finance constituted by an Executive Order in 2010. It envisages to strengthen and institutionalize the mechanism of maintaining financial stability, financial sector development, inter-regulatory coordination along with monitoring macro-prudential regulation of the economy. The Finance Minister heads it. Its members are - Governor Reserve Bank of India (RBl), Finance Secretary and/ or Secretary, Department of Economic Affairs (DEA), Secretary, Department of Financial Services (DFS), Secretary, Ministry of Corporate Affairs, Secretary, Ministry of Electronics and Information Technology, Chief Economic Advisor, Ministry of Finance, Chairman, Securities and Exchange Board of India (SEBI), Chairman, Insurance Regulatory and Development Authority (IRDA), Chairman, Pension Fund Regulatory and Development Authority (PFRDA), Chairman, Insolvency and Bankruptcy Board of India (IBBI). The Additional Secretary, Ministry of Finance, DEA, is the Secretary of the Council.
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