NFRA begins work to overhaul audit norms

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Subscribe to enjoy similar stories. The National Financial Reporting Authority (NFRA) has kicked off an epic overhaul of the way auditors verify the truthfulness of corporate financial information, in a change of regime from the current system where auditing standards issued by Institute of Chartered Accountants of India (ICAI) are deemed to be final.

According to two persons familiar with the development, NFRA has begun the revision of all audit and quality standards issued by ICAI, as the Centre seeks to align them with global practices. The authority, which has three ICAI representatives on its board, will submit the revised standards to the corporate affairs ministry for notification.

Out of ICAI's 38 audit standards, NFRA has already start work on revising SA600, which pertains to consolidated financial statements of business groups. According to one of the two people cited above, the authority has also started work on revising the remaining 37 audit standards, plus two other standards on quality management issued by ICAI.

“The Central government has asked (NFRA) for expediting the process of notifying audit standards, and NFRA is duty-bound to do that," the person cited above said on the condition of anonymity. Also read | ICAI puts its foot down, informs NFRA of its powers Queries emailed to the ministry of corporate affairs, ICAI and NFRA on Friday seeking comments remained unanswered at the time of publishing.

A second person, who is also privy to the development, said that NFRA has sent all the changes it wants to be incorporated in all these audit standards and the quality management norms, to ICAI for its views. ICAI had earlier called for a pause in the revision of SA600, saying that NFRA’s move came when