it’s official. The two audit regulators – ICAI and NFRA – are daunting, and even publicly, the CA Institute has outright rejected the March 2021 Technical Advisory Committee (TAC) report.
It may have missed the report – the first TAC, which had recommendations on increasing engagement with stakeholders – had formed the basis for the National Financial Reporting Authority (NFRA) in June, along with a consultation paper on the issue.
‘Far from the ground reality’
In a succinctly worded letter sent with about 120 pages of detailed comments on the NFRA consultation paper, CA Institute President Nihar N Jambusaria pointed out that the ICAI was “outright rejecting” the report and on the “one-sided surrealism” of the TAC. expressed serious concern. report good.
Jambusaria also noted that the paper’s misleading circular reasoning parallels, context and therefore the conclusions made were in many respects far from the ground reality.
ICAI wanted the TAC report to be quashed, saying it was based on the views of a small group of stakeholders who responded to a questionnaire. ICAI said the report is to be reworked based on the views of a larger sample group of stakeholders.
The ICAI, it said, will ensure that the observations are supported by appropriate research-based evidence rather than merely being arbitrary and face to face A distorted understanding and prejudiced opinion.
“… both NFRA and ICAI aim to work for the good of the general public and not as competing entities, yet it is observed that a non-cooperative approach is being adopted by NFRA and the way TAC The report and consultation paper has been worded, in which NFRA has also given its preliminary view in the said report, it appears that NFRA feels that there was no regulator for the accounting and auditing profession for so many years,” ICAI President Said the letter dated July 9 to NFRA.
Mandate of NFRA
On Monday, the NFRA made public all the responses received on its consultation paper on ‘Increasing engagement with stakeholders including those of the CA Institute’.
In his letter, the ICAI Chairman also reiterated that the mandate of NFRA as per the Companies Act 2013 is that of an advisory body, which has to be in line with the overall objective of ICAI’s regulation and development of the CA profession and not act as a “super”. To do. The regulator” is affecting the overall development of the CA profession.
Jambusaria said the TAC’s “harmful” report could damage the image of the CA profession. The letter said the report could also harm national interest due to changes in investment ratings and other parameters, which the World Bank considers while preparing the ‘Ease of Doing Business’ report.
ICAI said that instead of putting the views of NFRA directly in the public domain for stakeholders and public comments, it could have been consulted for a better understanding of the current dynamics.
.