Page 32 - Banking Finance August 2021

ARTICLE

Delhi. However, meetings can be held at such other places 6) A retired Chief Justice of a High Court or a person who
in India. Central Government shall lay down rules regarding had been a High Court Judge for not less than 5 years
place and frequency of meetings along with manner of to be nominated by the central government.
transacting businesses.
7) President of the Institute of Chartered Accountants of
India (ICAI).
Central Government in consultation with Comptroller &
Auditor General of India shall prescribe the form and manner
in which books of accounts and other books will be Structure of NFRA
maintained. Audit of the accounts of NFRA will be NFRA shall consist of the following committees:-
performed by C&AG and report will be forwarded to Central i) Accounting Standards Committee,
Government annually. NFRA shall prepare and forward an ii) Auditing Standards Committee, and
annual report as certified by C&AG giving its full activities iii) Enforcement Committee.
to the Central Government which will be laid before each
house of the Parliament along with annual report and audit
report. Powers and Functions of NFRA
1. NFRA may investigate either suomotu or on a reference
The NFRA shall consist of the following persons to be made by the Central Government in matters of
appointed by the Central Government, namely:- professional misconduct committed by any member or
1) A Chairperson who is an eminent person and has Chartered Accountants firm.
expertise in accounting, auditing, finance or law.
2. To make recommendations to the Central Government
2) A maximum of 15 members comprising of on formulation and laying down of accounting standards
a) Member- Accounting, and auditing policies for adoption by companies or their
auditors.
b) Member- Auditing and
3. To monitor and implement compliance relating to
c) Member- Enforcement.
accounting standards and auditing policies as prescribed.
3) A representative of the Ministry of Corporate Affairs
who is not below the rank of Joint Secretary or 4. To oversee the quality of service of professions
equivalent. associated with compliance of accounting standards and
auditing policies and suggest measures for improvement
4) A representative of RBI, nominated by it and who is a
5. NFRA shall have equivalent powers as a civil court under
member of RBI Board.
the Code of Civil Procedure, 1908. It can exercise the
5) A representative of SEBI who is its Chairman or whole- powers related to:-
time member and is nominated by SEBI. a) discovery and production of books or other
documents as specified by NFRA;
b) summoning and enforcing the attendance of
persons and examining them on oath;
c) inspection of books, registers and other documents
of any person;
d) issuing commissions for examination of witness or
other documents.
6. NFRA may impose penalties:
a) not less than one lakh rupees which may extend up
to five times of the fees received in case of
individuals and
b) not less than ten lakh rupees which may extend up
to ten times of the fees received in case of firms.

32 | 2021 | AUGUST | BANKING FINANCE