Page 33 - Banking Finance August 2021

ARTICLE

7. NFRA may consider an investigation based on
monitoring and compliance review of auditor or audit
firm upon recommendations by Member- Accounting
and Member- Auditing.

8. NFRA shall receive a final report from the Committee
on Enforcement on matters referred to them and issue
a notice in writing to the investigated company or the
professional on whom the action is proposed to be
taken.
9. NFRA may conduct quality review of the following class
of companies:-
a) Listed companies,
b) Unlisted companies having net worth or paid up
capital of not less than 500 crores or annual
turnover of not less than 1000 crores as on 31st as decided by the Committee on Accounting Standards
March of immediately preceding financial year, or NFRA and to issue such reports to NFRA.
c) Companies having securities listed outside India.
Functions of Committee on Auditing
10. NFRA may debar any member or a firm from engaging Standards:
himself or itself from practice as a member of the
Apart from the above similar functions as Committee on
Institute of Chartered Accountants of India for a
minimum period of six months which may extend upto Accounting Standards, the Committee on Auditing Standards
ten years on account of proved misconduct. has to discharge the following functions:-
i) To examine matters relating to formulation and laying
11. NFRA shall have the power to accept or overrule
down auditing standards for consideration by NFRA.
clarifications received or objections raised in writing.
ii) The Committee on Auditing Standards shall monitor the
12. NFRA may investigate against the auditor or audit firms compliance of auditors, audit firms and the audit LLPs.
which conducts-
a) audit of 200 or more companies in a year, iii) It may investigate or review selected audit
engagements including an individual or firm or an LLP.
b) audit of 20 or more listed companies
iv) The Committee may evaluate the sufficiency of the
Functions of Committee on Accounting quality control system of the auditor and manner of
documentation and communication of that system by
Standards:
the auditor.
a) To examine matters relating to formulation and laying
down accounting standards for consideration by NFRA.
Functions of the Committee on
b) To recommend any new standard to ICAI which the Enforcement:
Committee deems necessary to be examined for
formulation. i) To investigate matters relating to professional or other
misconduct committed by auditor, individual, firm or an
c) To examine recommendations made by ICAI.
LLP on recommendation by NFRA.
d) To recommend NFRA on the new or amended standards
ii) The Committee on Enforcement shall complete its
for its approval and to be forwarded to the Central
investigation within a period of 6 months on any matters
Government to be notified as a part of accounting
referred to it. In case of delay, specific time extension
standards.
has to be sought by providing reasonable justifications
e) To scrutinize the financial statements of such companies to NFRA.

BANKING FINANCE | AUGUST | 2021 | 33