Lok Sabha Question No. 1845 (UNSTARRED), answered on 2017-12-29
Subject: NFRA
Ministry: CORPORATE AFFAIRS
Asked by: MAHEISH GIRRI, RAM CHARITRA

## GOVERNMENT OF INDIA MINISTRY OF CORPORATE AFFAIRS

## LOK SABHA

UNSTARRED QUESTION NO. 1845 ANSWERED ON FRIDAY, THE 29TH DECEMBER, 2017/ PAUSHA 8, 1939 (SAKA)

NFRA

## QUESTION

1845. SHRI MAHEISH GIRRI:

SHRI RAM CHARITRA NISHAD:

Will the Minister of CORPORATE AFFAIRS be pleased to state:

कारपोरेट कार्य मंत्री

- (a)  whether the Companies Act, 2013 provides for constitution of the National Financial Reporting Authority (NFRA) as regulatory body for accounting sector;
- (b)  if so, the details thereof and the reasons for not notifying the relevant section till date;
- (c)    whether  his  Ministry  has  received  objections  from  Institute  of  Chartered Accountants of India (ICAI) for constitution of NFRA and if so, the reasons therefor;
- (d)  whether his Ministry intend to notify the relevant section and constitute NFRA, if
- so, the details thereof and the time by which the NFRA is likely to be constituted;
- (e) if not, the reasons therefor; and
- (f) whether there are more than 1,400 pending cases against Chartered Accountants in the country and if so, the details thereof?

## ANSWER

MINISTER OF STATE FOR LAW AND JUSTICE AND CORPORATE AFFAIRS

विवि और न्याय एिं कारपोरेट कायय मंत्रालय में राज्य मंत्री

(a) to (e):- Yes, Madam.  The Companies Act, 2013 provides for establishment of the National Financial Reporting  Authority (NFRA)  for, inter-alia,  recommending  to Government  on  formulation  and  laying  down  of  accounting  and  auditing  policies, adoption of standards, monitoring their compliances and overseeing quality of service of  professionals  associated  with  such  compliance.  The  Institute  of  Chartered Accountants of India (ICAI) has represented to the Ministry broadly stating that the existing  framework  in  the  ICAI  for  performing  these  functions  is  adequate.  The Government however is of the view that, in addition to the self-regulation mechanism existing within the ICAI framework, there is need for an independent regulator to inter

(SHRI P. P. CHAUDHARY)

( श्री पी. पी. चौधरी )

alia oversee compliance with accounting and auditing standards and for oversight of audit professionals. Internationally also, independent regulators have been assigned these functions in over 50 countries. Steps are underway for establishing NFRA.

(f):-  ICAI  has  informed  that  as  on  20 th   December,  2017,  1583  cases  are  pending  at different stages of disciplinary proceedings.  The detail of stages at which these are pending is as under:-

| Stage at which cases are Pending                                                                               |   Number of Cases |
|----------------------------------------------------------------------------------------------------------------|-------------------|
| Cases before the Board of Discipline and Disciplinary Committee for hearing                                    |               395 |
| Cases where prima facie opinion is to be placed before the Board of Discipline/Disciplinary Committee (BOD/DC) |               186 |
| Cases where prima facie opinion formed placed before BOD/DC but referred back to Director (Discipline)         |                15 |
| Cases where prima facie opinion is under finalization                                                          |               543 |
| Cases where prima facie opinion is to be formed                                                                |               102 |
| Cases where additional documents have been called from the parties                                             |               183 |
| Cases where Rejoinder is awaited from Complainant                                                              |                30 |
| Cases where Written Statement is awaited from Respondent                                                       |               129 |
| Total                                                                                                          |              1583 |

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