# NFRA will monitor BIG COMPANIES AS FOLLOWS:
a. ALL Listed Companies/ Body Corporates; OR
b. Unlisted Companies with Paid up Capital or Loans > = INR 500 crores OR Turnover > = INR 1000 crores; OR
c. ALL Banks/Insurance/Electricity Companies; OR
d. Certain specific foreign Subsidiaries/Associates of Indian Companies.
Note - For auditor of these Companies, ICAI do not have any investigation role.
!!! COMPANY/AUDITOR ONCE GOVERNED BY NFRA WILL BE COVERED BY NFRA for 3 MORE YEARS EVEN IF LIMITS ARE REDUCED/ LISTED STATUS CHANGES. !!!
# For Other Companies, ICAI will have the power to initiate disciplinary proceedings.
B. Powers and Responsibilities of NFRA
# Notifying Accounting Standards & Auditing Standards –
Firstly, ICAI Recommend ------ Then, NFRA will check ------ Then, Forward to CG for approval
# Monitoring Compliance of AS – For AS compliance, NFRA MAY REVIEW FS of such Companies and ask for further Information, seek additional information, initiate for penal proceeding if any wrongdoing.
# Monitoring Compliance of SA – For SA Compliance, NFRA MAY REVIEW AUDITOR WORKING PAPERS, check Sufficiency of Quality System within the Audit Firm, Supervise or Test the audit.
Note – Means for Big Companies, Peer Reviewing Powers are now with NFRA and not with ICAI.
C. Filings with NFRA
# Notice to the authority by Body Corporate (other than Company) regarding Auditor – Form NFRA 1
# AUDITOR of Big Companies required to file ANNUAL RETURN to NFRA till 30th April every year.
D. Powers under Section 132 of the Companies Act, 2013
## Monitoring and Regulating Powers – recommend CG w.r.t. AS and SAs and checking proper compliance of the same, oversee quality of audit firms.
## Investigating and Summoning Powers – Investigation of audit firms, summoning and enforcing attendance, Inspection of records.
## Penalizing Powers – Individual Auditors (INR 1 Lakh to 5 times of Fees), Firm of Auditors (INR 5 Lakhs to 10 times of Fees).
## Debarring Powers – Debarring from Practice as a member of ICAI for a period of 6 months to 10 years.
AASHISH KUMAR JAIN & ASSOCIATES