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National Financial Reporting Authority (NFRA)

  • Published
    17th Sep, 2021

GS-III: Economy

  • Economic Sectors, Economic Governance
Context

The National Financial Reporting Authority recently said that companies will be chosen for audit quality and financial reporting quality review based on the impact the entity has on the economy.

Prelims question:

Which of the following functions are performed by the National Financial Reporting Authority (NFRA)?

  1. Audit of all listed companies
  2. Audit of all unlisted companies
  3. Quality audits of private limited companies

Select the correct answer suing the code given below:

  • A.
  • B.
  • C.
  • D.

Mains Question:

Write a note on the objectives and significance of the National Financial Reporting Authority. (150 Words)

Approach:

  • Introduce by describing National Financial Reporting Authority, its formation under Companies act, 2013
  • Give a background on the need for NFRA (Eg. Satyam scandal)
  • Enumerate the objectives of NFRA
  • Discuss the significance if having an independent regulator to oversee the auditing profession and accounting standards in India
  • Contrast NFRA with ICAI
  • Way Forward / Conclusion

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