MCA starts reviewing Audit Standard Norms

The Ministry of Corporate Affairs (MCA) has begun a complete review of its regulations, including audit and accounting, through an extended public engagement process, according to MCA Secretary Manoj Govil on Tuesday.

Speaking at a conference organized by the National Financial Reporting Authority (NFRA), Govil stated that MCA was also working with the Institute of Chartered Accountants of India (ICAI) to realize the aim of having India’s own large audit companies.

He urged the corporate sector, including chief executive officers (CEOs) and chief financial officers (CFOS), to improve upon the level of public trust within the business ecosystem as preparers of financial statements.

Govil stated that the government has been working on building a vision and a road plan to accomplish the Viksit Bharat 2047 aim of reaching $30 trillion in aggregate GDP.

“The corporate sector must play a critical role in the realization of this objective. This role has significant responsibility and public accountability. To play its rightful role, the industry must enhance its degree of public trust,” according to Govil.

He emphasized the importance of strong regulatory mechanisms and frameworks for protecting the interests of both domestic and international stakeholders.

According to the secretary of the MCA, “Transparency of financial reporting and high quality of audits have a crucial role in inspiring investor confidence, facilitating informed decision making and fostering a culture of trust and credibility within the business ecosystem.”

He stated that MCA has been committed in its efforts to strengthen regulatory frameworks and improve compliance standards.

Govil further stated that difficulties about audit quality, as evidenced in numerous NFRA directives and inspection reports, have assisted stakeholders in better comprehending the dimensions and impact.

NFRA chairman Ajay Bhushan Pandey emphasized the importance of establishing trust in financial reporting, capital markets, and regulatory systems. He stated that independent regulators and high-quality financial reporting frameworks are required for the financial and capital markets.

Commenting on the NFRA’s journey, Pandey stated that the authority began with a focus on enforcement rather than a “supervisory approach” because the current situation demanded that kind of treatment.

Addressing the two-day conference on Transparent Financial Reporting and Audit Quality: Pillars of Corporate Governance, Pandey stated, “Those who have gathered here have a huge responsibility to contribute to the protection of the interests of investors and shareholders in the larger public interest. This must be done in the manner that we conduct the watchdog duty, whether through the audit committee, independent directors, corporate management, investor forums, auditors, or independent regulators.”