NFRA – Vinod Kothari Consultants

NFRA moved the needle, and it is to be seen if the ocean starts boiling.! A 7th Jan 2026 circular from NFRA, addressed to listed entities and their auditors, seemed like an attention-drawer to standards of auditing which are already there, and yet, the auditing fraternity is holding meetings with boards and senior management of listed entities, to comply with what was always a compliance requirement. Does the 7th Jan circular bring up any new boxes to be ticked, any new procedures to be laid or responsibilities to be reiterated? As we detail out in this article, there may be need for action on several fronts on the part of listed entities – identification of nodal persons, listing developments that need to be communicated, constituting team for responding to the findings of the auditors in course of their audit other than those that sit in the audit report, formation of sub-groups of TCWG, etc.

NFRA proposes copious financial information disclosures by auditors of large listed companies

January 19, 2023/0 Comments/in Corporate Laws /by Staff

An Annual Transparency Report to be published on the websites of the auditors

– Burhanuddin Kholiya and Payal Agarwal | corplaw@vinodkothari.com

In a major step to ensure transparency of audit and non-audit services, and internal protocols, quality checks, etc being maintained by auditors or large listed entities, the National Financial Reporting Authority (NFRA), vide a letter dated 16th January, 2023 (hereinafter referred to as “Proposal”), has proposed publication of an Annual Transparency Report (ATR) by the auditors of top 1000 listed companies. The ATR contains copious data, and interestingly, requires financial information about the audit firm, as well as its network entities. NFRA indicates that this proposal is in line with global practices, citing examples of regulations in the European Union (EU) and Australia.

The Proposal is said to be in terms of Rule 8(2) of the NFRA Rules, 2018 which empowers NFRA to require an auditor to report on its governance practices and internal processes designed to promote audit quality, protect its reputation and reduce risks including the risk of failure of the auditor and may take such action on the report as may be necessary, is proposed to be implemented for FY23 to begin with.

A quick snapshot of the same can be referred here.

FAQs on National Financial Reporting Authority (NFRA) Rules, 2018

July 9, 2019/3 Comments/in Amendments to the Companies Act 2013, Companies Act 2013, Corporate Laws, MCA /by Vinod Kothari Consultants

Tag Archive for: NFRA

Posts

Tagging auditors and TCWG to make amends

Introduction

Subscribe to receive regular updates!