The last date for submission of comments on Consultation Paper on Statutory Audit and Auditing Standards for Micro, Small and Medium Companies (MSMCs) has been extended from 10th November to 30th November 2021. Consultation Paper may be viewed at: https://nfra.gov.in/sites/default/files/NFRAConsultationPaperMSMCs_0.pdf
The comments may either be submitted by email at firstname.lastname@example.org or by post to NFRA at:
National Financial Reporting Authority
7th-8th Floor, Hindustan Times House, 18-20,
Kasturba Gandhi Marg, New Delhi 110001
NFRA had conducted a preliminary analysis wherein it found that on the key financial parameters of the companies registered in India from their MCA-21 filings and it is found that the fees paid to auditors by a large majority of Micro, Small and Medium Companies (MSMCs) are way below what an audit, when performed in compliance with the letter and spirit of the Standards of Auditing, would require.
Further, it was also commented that the audit being done in the fees charged by the Audit firms cannot lead to a good quality audit and in many cases Audit fees was even Nil.
National Financial Reporting Authority (“NFRA” or “Authority”), was constituted as an independent regulator for accounting and auditing in India in October 2018. NFRA’s Charter positions it as an organisation that should be known for Objectivity, Integrity, Impartiality, Independence, Fairness, and Transparency. In making any recommendations, NFRA attempts to keep in mind the implications of such recommendations on the Ease of Doing Business. Section 132(2)(a) of Companies Act, 2013 requires NFRA 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.
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