Rule 8 - Monitoring and enforcing compliance with auditing standards

NFRA Rule 8 audit oversight: reviewing working papers, quality controls and governance reports, with public non-compliance findings

Rule 8 prescribes the NFRA's powers and procedure for monitoring and enforcing compliance with auditing standards by companies or body corporates covered under rule 3. It authorises NFRA to review audit working papers and related communications, evaluate the sufficiency and documentation of an auditor's quality control system, and conduct other testing of audit, supervisory and quality control procedures, enabling regulatory scrutiny of audit performance. NFRA may require auditors to report on governance practices and internal processes for audit quality and risk reduction, seek additional information, and require personal appearance for explanations, facilitating corrective or further action. Monitoring is to be carried out through officers or industry-experienced experts. Findings of non-compliance must be published, subject to public interest exceptions, while proprietary or confidential information is protected unless publication is justified and recorded; such information may be separately reported to the Central Government.