Powers of NFRA which will be used against Chartered Accountants :Ministry of Corporate Affairs has notified relevant sections to give effect to NFRA by way of notification on 24th of October,2018.
Below are the few points and critical aspects that you needs to know about NFRA:
1. Till now ICAI used to make recommendations to the Central Government on the formulation and laying down of accounting and auditing policies and standards but, from now onwards ICAI will act as advisory to NFRA and NFRA will recommend to the Government.
2. NFRA have the power to investigate, either suo motu or on a reference made to it by the Central Government, for such class of bodies corporate or persons, in such manner as may be prescribed into the matters of professional or other misconduct committed by any member or firm of chartered accountants.
And no other institute or body shall initiate or continue any proceedings in such matters of misconduct where the National Financial Reporting Authority has initiated an investigation. So, ICAI cannot interfere where NFRA has issued proceedings.
3. NFRA have the same powers as are vested in a civil court under the Code of Civil Procedure, 1908, while trying a suit, in respect of the following matters, namely:
(i) discovery and production of books of account and other documents, at such place and at such time as may be specified by the National FinancialReporting Authority;
(ii) summoning and enforcing the attendance of persons and examining them on oath;
(iii) inspection of any books, registers and other documents of any person referred to in clause (b) at any place;
(iv) issuing commissions for examination of witnesses or documents;
4. In case of professional or other misconduct is proved, NFRA have the power to impose penalty of
(I) not less than one lakh rupees, but which may extend to five times of the fees received, in case of individuals; and
(II) not less than ten lakh rupees, but which may extend to ten times of the fees received, in case of firms;
5. NFRA has the power of debarring the member or the firm from engaging himself or itself from practice as member of the Institute of Chartered Accountant of India
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This Article has been Written by CA Deepak Gupta. He is having 7 Years of Experience in Direct & Indirect Taxation. He Can be reached at gupta.k.deepak@gmail.com