Lok Sabha Question No. 2488 (UNSTARRED), answered on 2025-08-04
Subject: Audit and Reviews conducted by NFRA
Ministry: CORPORATE AFFAIRS
Asked by: Shri Arun Bharti

## GOVERNMENT OF INDIA

## MINISTRY OF CORPORATE AFFAIRS LOK SABHA

## UNSTARRED QUESTION NO. 2488 ANSWERED ON MONDAY, AUGUST 04, 2025/ SRAVANA 13, 1947 (SAKA)

## Audit and Reviews Conducted by NFRA QUESTION

2488. Shri Arun Bharti:

Will the Minister of CORPORATE AFFAIRS

be pleased to state:

- (a) the year-wise details of the audits and reviews conducted by National Financial  Reporting  Authority  (NFRA)  during  the  last  five  years  and  the mechanisms  in  place  to  monitor  NFRA's  effectiveness  in  achieving  its goals;
- (b) the  details  of  the  partnerships  with  academic  and  professional institutions to advance research in financial reporting standards;
- (c) the  initiatives  undertaken  by  NFRA  to  raise  awareness  among companies and auditors about their responsibilities and the importance of compliance;
- (d) the steps taken to ensure timely resolution of complaints and maintain the confidence of stakeholders in its regulatory processes; and
- (e) whether the Government is considering to expand NFRA's jurisdiction to cover additional entities or sectors and if so, the details thereof?

## ANSWER

MINISTER  OF  STATE  IN  THE  MINISTRY  OF  CORPORATE  AFFAIRS  AND MINISTER  OF  STATE  IN  THE  MINISTRY  OF  ROAD  TRANSPORT  AND HIGHWAYS.

(SHRI HARSH MALHOTRA)

- (a) (i) Year-wise  details  of  Audit  Quality  Reviews  (AQRs),  Financial Reporting Quality Reviews (FRQR) and Audit quality inspections of audit firms conducted by NFRA are as follows:
- (ii) A Memorandum  of Understanding between Ministry of Corporate  Affairs  and  National  Financial  Reporting  Authority spells  out  clearly  performance  parameters,  output  targets  in terms of details of programme of work and qualitative improvement in output, along with commensurate input requirements.
- (b) NFRA has not partnered with any academic or professional institute for research in financial reporting standards.
- (c) NFRA has engaged extensively and periodically with stakeholders including CEOs, CFOs, Independent Directors and members of the profession and conducted a number of webinars on various topics related to financial reporting and auditing, including an international conference in 2024. It also issues circulars, reiterating  provisions  in  law  and  standards,  to  help  prevent recurrence of some observed non-compliances and to help bring in systematic  improvement  in  the  quality  of  financial  reporting  in India, towards advising and guiding various stakeholders. Further, NFRA publishes the auditor-audit committee interaction series to help improve communication between auditors and committees as it is a significant parameter towards ensuring better audit quality.

| Financial Year   | Reviews                            |   No. of Reviews |
|------------------|------------------------------------|------------------|
| 2019-20          | Audit Quality Review               |               01 |
| 2020-21          | Audit Quality Review               |               01 |
| 2020-21          | Supplementary Audit Quality Review |               01 |
| 2021-22          | Audit Quality Review               |               02 |
| 2021-22          | Financial Reporting Quality Review |               02 |
| 2022-23          | Audit Quality Review               |               01 |
| 2022-23          | Financial Reporting Quality Review |               02 |
| 2023-24          | Audit Quality Inspection           |               05 |
| 2024-25          | Audit Quality Inspection           |               07 |

NFRA  has  also  collaborated  with  Indian  Institute  of  Corporate Affairs (IICA) and a 4-month course has been launched for capacity building of independent directors and audit committee members of companies.

- (d) NFRA  has  a  dedicated  online  portal  for  filing  complaints.  The complaints  received  are  dealt  with  as  per  extant  guidelines  on procedure  for  complaint  handling  in  NFRA.  Quarterly  reports  on status of show cause notices are also published on NFRA website.
- (e) At present, there is no such proposal under consideration.

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