Top auditors, consultants back NFRA's tighter group audit norms
Subscribe to enjoy similar stories. The National Financial Reporting Authority’s (NFRA) board will soon consider enforcing tighter norms for statutory audits of conglomerates, two people aware of the development said, a move that has received support from some of the top audit and consulting firms.
The period for receiving public feedback ends this month and the NFRA’s 12-member board is expected to meet soon after that, said one of the people cited above on the condition of anonymity. It will consider the proposal for making the auditor of the holding company of business groups responsible for their consolidated financial statements even if subsidiary accounts are signed off by other auditors.
“Implementation will be based on the decision of NFRA’s board, which comprises representatives of Sebi, RBI, the Comptroller and Auditor General of India (CAG) and two independent members. The board decision will be notified," said the person.
The NFRA is set to go ahead with the changes even as audit profession’s self-regulator and rule maker, the Institute of Chartered Accountants of India (ICAI), had called for a “pause" on harmonizing domestic audit norms for group companies with the global practices to allow for “a comprehensive review and discussion with all relevant stakeholders". Also read | Audit watchdog set to widen inspections To be sure, NFRA has offered a carve-out for audit of certain businesses from the proposed norms so that small auditors’ concerns about larger audit firms increasing their market share are addressed.
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