Confederation of Indian Industry (CII) along with National Foundation for Corporate Governance (NFCG) organized a two-day Conference on “Financial Reporting & Governance Framework” ‘on 15th & 16th September, 2021.
Addressing the valedictory session of the conference, “Role of Regulators; and The Future of Audit”, Mr R. Sridharan, Chairperson, National Financial Reporting Authority (NFRA), highlighted the need of continuous improvement in corporate financial reporting. Mr Sridharan said that, NFRA rules provide for monitoring entire financial reporting chain and its objectives will be meaningfully achieved through adherence to prescribed rules. NFRA’s functioning will be mindful of the need to promote the ease and speed of doing business and will be guided by the overall public interest. Highlighting the statistics, he shared that, as on March 2019, Approx. 6500 Companies were under NFRA jurisdiction with a diverse auditor profile.
Referring the core principles of International Forum of Independent Audit Regulator (IAR), Mr Sridharan said that, the responsibilities and powers of audit regulators should, at a minimum, require independent oversight of the audits of public interest entities. Audit regulators should be operationally independent, transparent, accountable and should have comprehensive enforcement power. These principals equally apply to NFRA.
Mr Sridharan shared that, to observe compliance with the Auditing and Accounting standards, NFRA has designed the Inspection Program. Going forward, NFRA proposes to adopt a risk-based approach for selection of companies based on External Impact Factors; and Risk of Material Misstatement (“RoMM”) Factors. NFRA will give the highest priority to companies which are in the high RoMM/substantial external impact cell. NFRA Reports and Orders clearly enunciate, what matters will be examined under audit quality and clarifies the scope available under the law for the provision of non-audit services by the statutory auditor. NFRA is confident that the approach it has adopted is robust enough to withstand critical judicial scrutiny, stated the NFRA Chairman.
Speaking on Standards and standard setting framework, Mr Sridharan said that, NFRA needs to consider standard setting as a core activity and build up expertise so as to effectively promote the public interest. Mr Sridharan highlighted that, NFRA aim will be to create conditions that would reassure those who must deal with such companies about the basic reliability of their financial statements.
Mr Shailesh Haribhakti, Mr P R Ramesh and Mr Harinderjit Singh also spoke for strengthening the Audit profession during the session. The session was attended by approx. 1000 participant.
16 September 2021