The government is consulting stakeholders to finalise technical rules for the National Financial Reporting Authority (NFRA), Union minister P P Chaudhary has said.
Besides, the Corporate Affairs Ministry is processing applications received for the posts of chairperson and full-time members at the regulator.
In March, the Cabinet approved setting up of the NFRA under the Companies Act, 2013. The independent regulator would have sweeping powers to act against erring auditors and auditing firms.
Setting up of the NFRA also comes at a time when auditors have come under the regulatory lens for alleged lapses relating to various corporate misdoings.
On May 30, the ministry had sought applications for the posts of chairperson and three full-time members at the NFRA.
Chaudhary, the Minister of State for Corporate Affairs, said the ministry is processing the applications.
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"The consultation process for finalisation of the NFRA (Technical) Rules with stakeholders is ongoing," he told PTI.
The jurisdiction of the NFRA -- which would be an oversight body for auditors -- would extend to all listed companies as well as large unlisted public companies.
Besides, the government can refer other entities for investigation by the NFRA where the public interest would be involved. It would also have powers to debar an erring auditor or auditing firm for up to ten years besides slapping heavy penalties.
As per Section 132 of the Act, NFRA would have powers to impose less than Rs 1 lakh fine and the amount can extend up to five times of the fees received in case of individuals.
For firms, the minimum penalty would be Rs 10 lakh and could go up to ten times of the fees received, according to the Act.
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