September 30, 2022

national financial reporting authority: national financial reporting authority planning audit opinion

The National Financial Reporting Authority (NFRA) will issue notices to help accounting and auditing firms better understand industry requirements, its chairman Ajay Bhushan Pandey said on Wednesday. This, Pandey said, is intended to make businesses and chartered accountants more aware of the regulatory requirements for audits.

He said based on referrals received from government and other regulators, NFRA discovers some common deficiencies in company audits.

“We are now thinking of at least launching a system of some sort of advice,” Pandey said at FICCI CAPAM 2022. “(So that) companies also become aware.”

Regarding accounting standards, he said that there is a misconception that accounting standards are some kind of guiding principles.

He said that after the Clarity project, undertaken in 2007, compliance with these accounting standards became mandatory. In this regard, he said that auditors should bear in mind principles such as professional skepticism when undertaking audits.

Pandey said NFRA’s goal is to build trust among market participants regarding auditing standards.

He said companies have the freedom to bring their audits in line with international standards, as this seems to bring more comfort to investors, especially overseas.

Pandey said NFRA is looking at the best global approaches while addressing industry issues. “Today, the whole world is a global village… sticking to international accounting and auditing standards would inspire a lot of confidence in international and domestic investors.”