Companies Bill for independent regulator for auditors

The Companies Bill, 2011 provides for setting up of National Financial Reporting Authority (NFRA), an independent regulator for auditors, Parliament was informed. The authority would formulate accounting and auditing standards as well as monitor and enforce them among other things, Minister of Corporate Affairs Sachin Pilot said in a written reply tabled in the Rajya Sabha yesterday. The Parliamentary Standing Committee on Finance which examined the Companies Bill, 2009 and 2011 had recommended that National Advisory Committee on Accounting and Auditing Standards (NACAAS) be institutionalised not only as a body for setting up auditing standards but also as a quasi-regulatory body for supervising the quality of audit, he said. The proposed NFRA would also take necessary action in certain cases against professional misconduct against chartered accountants, he added. Besides, a report titled "Corporate Governance to Reality" by Indian Institute of Corporate Affairs (IICA) recommends an independent regulator for auditors, he said. Regarding the draft of National Corporate Governance Policy, Pilot said the committee to formulate a policy document on Corporate Governance under the Chairmanship of Adi Godrej has submitted its report. "It is proposed to obtain comments/suggestions of public to the recommended principles before deciding further course of action in the matter, " he added.