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Consider the following statements regarding National Financial Reporting Authority (NFRA):
- It is an independent regulatory body established to oversee the auditing profession and accounting standards in India.
- It is constituted under the provisions of the Companies Act, 2013.
- It may take action against any functionary of a company that has the responsibility for financial reporting.
Which of the statements given above is/are correct?
- a)1 and 2 only
- b)1 only
- c)2 and 3 only
- d)1, 2 and 3
Correct answer is option 'A'. Can you explain this answer?
Most Upvoted Answer
Consider the following statements regarding National Financial Reporti...
- National Financial Reporting Authority (NFRA) is an independent regulator to oversee the auditing profession and accounting standards in India under the Companies Act 2013. NFRA was constituted in 2018 by the Government of India under Sub Section (1) of section 132 of the Companies Act, 2013. Hence, statements 1 and 2 are correct.
- NFRA is responsible for recommending accounting and auditing policies and standards in the country, undertaking investigations and imposing sanctions against defaulting auditors and audit firms in the form of monetary penalties and debarments from practice for up to 10 years.
- The NFRA may take action against auditors for professional misconduct but when it came to other functionaries of a company who have the responsibility for financial reporting, penal powers continue to be vested with the Centre. Hence, statement 3 is not correct.
- NFRA operates under a single section of the Companies Act. The section does not provide comprehensive coverage of all the functions and powers that are required to constitute the authority as a corporate financial reporting regulator‘.
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Consider the following statements regarding National Financial Reporti...
Statement 1: It is an independent regulatory body established to oversee the auditing profession and accounting standards in India.
NFRA is indeed an independent regulatory body that has been established to oversee the auditing profession and accounting standards in India. It was set up under the provisions of the Companies Act, 2013. NFRA's primary objective is to protect the public interest by ensuring the quality of audits and financial reporting.
Statement 2: It is constituted under the provisions of the Companies Act, 2013.
This statement is correct. NFRA is constituted under the provisions of the Companies Act, 2013. Section 132 of the Companies Act, 2013 provides for the establishment of NFRA. The Act empowers the Central Government to constitute NFRA as an independent regulator for the auditing profession in India.
Statement 3: It may take action against any functionary of a company that has the responsibility for financial reporting.
This statement is correct. NFRA has the authority to take action against any functionary of a company that has the responsibility for financial reporting. NFRA has the power to investigate and impose penalties on auditors and audit firms for professional misconduct and non-compliance with auditing standards. It can also recommend disciplinary action against members of professional bodies such as the Institute of Chartered Accountants of India (ICAI).
Since all the statements are correct, the correct answer is option 'A' - 1 and 2 only.
NFRA is indeed an independent regulatory body that has been established to oversee the auditing profession and accounting standards in India. It was set up under the provisions of the Companies Act, 2013. NFRA's primary objective is to protect the public interest by ensuring the quality of audits and financial reporting.
Statement 2: It is constituted under the provisions of the Companies Act, 2013.
This statement is correct. NFRA is constituted under the provisions of the Companies Act, 2013. Section 132 of the Companies Act, 2013 provides for the establishment of NFRA. The Act empowers the Central Government to constitute NFRA as an independent regulator for the auditing profession in India.
Statement 3: It may take action against any functionary of a company that has the responsibility for financial reporting.
This statement is correct. NFRA has the authority to take action against any functionary of a company that has the responsibility for financial reporting. NFRA has the power to investigate and impose penalties on auditors and audit firms for professional misconduct and non-compliance with auditing standards. It can also recommend disciplinary action against members of professional bodies such as the Institute of Chartered Accountants of India (ICAI).
Since all the statements are correct, the correct answer is option 'A' - 1 and 2 only.
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Consider the following statements regarding National Financial Reporting Authority (NFRA): It is an independent regulatory body established to oversee the auditing profession and accounting standards in India. It is constituted under the provisions of the Companies Act, 2013. It may take action against any functionary of a company that has the responsibility for financial reporting.Which of the statements given above is/are correct?a)1 and 2 onlyb)1 onlyc)2 and 3 onlyd)1, 2 and 3Correct answer is option 'A'. Can you explain this answer?
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Consider the following statements regarding National Financial Reporting Authority (NFRA): It is an independent regulatory body established to oversee the auditing profession and accounting standards in India. It is constituted under the provisions of the Companies Act, 2013. It may take action against any functionary of a company that has the responsibility for financial reporting.Which of the statements given above is/are correct?a)1 and 2 onlyb)1 onlyc)2 and 3 onlyd)1, 2 and 3Correct answer is option 'A'. Can you explain this answer? for UPSC 2025 is part of UPSC preparation. The Question and answers have been prepared according to the UPSC exam syllabus. Information about Consider the following statements regarding National Financial Reporting Authority (NFRA): It is an independent regulatory body established to oversee the auditing profession and accounting standards in India. It is constituted under the provisions of the Companies Act, 2013. It may take action against any functionary of a company that has the responsibility for financial reporting.Which of the statements given above is/are correct?a)1 and 2 onlyb)1 onlyc)2 and 3 onlyd)1, 2 and 3Correct answer is option 'A'. Can you explain this answer? covers all topics & solutions for UPSC 2025 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Consider the following statements regarding National Financial Reporting Authority (NFRA): It is an independent regulatory body established to oversee the auditing profession and accounting standards in India. It is constituted under the provisions of the Companies Act, 2013. It may take action against any functionary of a company that has the responsibility for financial reporting.Which of the statements given above is/are correct?a)1 and 2 onlyb)1 onlyc)2 and 3 onlyd)1, 2 and 3Correct answer is option 'A'. Can you explain this answer?.
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