The Parliament was today informed about the Governments interest on introducing a separate and independent regulator to monitor the Chartered accounts. However, the Institute of Chartered Accountants (ICAI) the apex body regulating the accounting and auditing standards as well as the audit professionals opposing the Government’s decision.
The institute is of the view that existing framework of the regulator to perform this function is “adequate”. “The government, however, is of the view that, in addition to the self regulation mechanism existing within the ICAI framework, there is a need for an independent regulator to inter alia oversee compliance with accounting and auditing standards and for oversight of audit professionals,” minister of state for corporate affairs P.P. Chaudhary said in a written reply to the Lok Sabha.
Such independent regulators have been assigned these functions in over 50 countries. The steps are underway for establishing the National Financial Reporting Authority (NFRA), the minister said.
The Companies Act provides for setting up of NFRA for recommending to government on formulation and laying down of accounting and auditing policies, adoption of standards, monitoring their compliance and overseeing quality of service of professionals associated with such compliance.
ICAI informed that till 20 December this year, a total of 1,583 cases are pending at different stages of disciplinary actions.