New audit regime in sync with Viksit Bharat vision: NFRA chief
Indian audit standards with global norms is a «major reform towards corporate governance and making India a developed country» by 2047, National Financial Reporting Authority (NFRA) chairman Ajay Bhushan Prasad Pandey told ET, while allaying fears it would lead to audit work concentration or disruptions.
Pandey added that 39 of the 40 new audit rules proposed by the NFRA board this week will be applicable to all companies without any special dispensation.
The revised standard on auditing (SA) 600, which proposes to make the principal auditor responsible for the entire corporate group's financial statements, would apply only to listed companies, banks and insurers, barring the state-run ones, he said. «We can't afford to have any standards that will be at variance with the global ones and which don't inspire trust and confidence of investors, both global and Indian,» Pandey said. «A developed India can't afford to have inferior audit standards. The upgrade will help detect any deviation or irregularity (in the financial performance of companies) at a very early stage, thereby protecting the interests of shareholders.»
Following a two-day meeting of its board through November 12, the NFRA decided to propose the 40 standards to the corporate affairs ministry for consideration and notification. The audit standards were firmed up by the Institute of Chartered Accountants of India (ICAI) and referred to the NFRA for examination.
The 12-member NFRA board has three representatives of the institute.
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