About NFRA

• National Financial Reporting Authority (NFRA) was constituted in 2018 under the Companies Act, 2013.
• NFRA is an independent regulator overseeing the auditing profession and is a part of the Ministry of Corporate Affairs (MCA).
• It has taken over all the powers of Institute of Chartered Accountants of India (ICAI) regarding regulation of auditors.

Functions and powers of NFRA

• Recommend accounting and auditing policies and standards to be adopted by companies;
• Monitor and enforce compliance with accounting standards and auditing standards. NFRA has also been given powers to investigate professional misconduct committed by members of the ICAI for prescribed class of body corporate or persons.
• NFRA is empowered to oversee the quality of audit service and undertake investigation of companies whose securities are listed on any stock exchange in India or abroad.
• Also, it can probe unlisted public companies having paid-up capital of no less than Rs 500 crore or annual turnover of no less than Rs 1,000 crore.

Why in News?

• Audit regulator NFRA has constituted a technical advisory committee (TAC) under the chairmanship of R. Narayanaswamy, Professor, Indian Institute of Management, Bangalore.
• This TAC, which comprises seven members including the chairman, would among other things aid and advise the executive body of the NFRA on issues relating to drafts of accounting standards and auditing standards.