New Delhi: Section 132 of the Companies Act, 2013 provides for constitution of the National Financial Reporting Authority (NFRA) and subsection (4) thereof confers powers on NFRA, for the imposition of penalties on audit firms. Shri P.P. Chaudhary, Minister of State for Corporate Affairs and Law & Justice said in the Rajya Sabha today.
The Chartered Accountants Act, 1949 (Act) provides for the imposition of penalties on members of the Institute of Charted Accountants of India (ICAI).
The ICAI had submitted a proposal to the Government for an amendment to the Act to, inter alia, provide for registration of audit firms, the procedure for taking necessary disciplinary action against audit firms (on the lines of such procedure for individual members) and the imposition of penalties on audit firms.