The Standing Committee on Finance in its 21st Report had recommended the establishment of NFRA. Section 132 of The Companies Act, 2013 deals with Constitution of National Financial Reporting Authority. Its major functions are to –
- make recommendations to the Central Government on the formulation and laying down of accounting and auditing policies and standards for adoption by companies or class of companies or their auditors, as the case may be;
- monitor and enforce the compliance with accounting standards and auditing standards in such manner as may be prescribed;
- oversee the quality of service of the professions associated with ensuring compliance with such standards, and suggest measures required for improvement in the quality of service and such other related matters as may be prescribed etc.
On 1 March,2018, Cabinet approved the proposal for the establishment of National Financial Reporting Authority (NFRA) and creation of one post of Chairperson, three posts of full-time Members and one post of Secretary for NFRA.
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