TaxTMI 
TaxTMI 
TaxTMI 
*NFRA RULES*
*A. Applicability:*_
# *NFRA will monitor BIG COMPANIES AS FOLLOWS*:
a. *ALL Listed Companies*/ Body Corporates; OR
b. *Unlisted Companies with Paid up Capital or Loans > = INR 500 crores* OR *Turnover > = INR 1000 crores*; OR
c. *ALL Banks/Insurance/Electricity Companies*; OR
d. Certain specific *foreign Subsidiaries/Associates of Indian Companies*.
*Note* - For auditor of these Companies, *ICAI do not have any investigation role*.
!!! *COMPANY/AUDITOR ONCE GOVERNED BY NFRA WILL BE COVERED BY NFRA for 3 MORE YEARS EVEN IF LIMITS ARE REDUCED/ LISTED STATUS CHANGES.* !!!
# *For Other Companies*, ICAI will have the power to initiate disciplinary proceedings.
*B. Powers and Responsibilities of NFRA*_
# Notifying *Accounting Standards* & *Auditing Standards* –
*Firstly, ICAI Recommend* ------ *Then, NFRA will check* ------ *Then, Forward to CG for approval*
# *Monitoring Compliance of AS* – For *AS* compliance, *NFRA MAY REVIEW FS of such Companies* and ask for further Information, seek additional information, initiate for penal proceeding if any wrongdoing.
# *Monitoring Compliance of SA* – For SA Compliance, *NFRA MAY REVIEW AUDITOR WORKING PAPERS*, check Sufficiency of Quality System within the Audit Firm, *Supervise or Test the audit*.
*Note – Means for Big Companies, Peer Reviewing Powers are now with NFRA and not with ICAI._*
*C. Filings with NFRA*_
# *Notice to the authority by Body Corporate* (other than Company) regarding Auditor – *Form NFRA 1*
# *AUDITOR of Big Companies required to file ANNUAL RETURN to NFRA till 30th April every year.*
*D. Powers under Section 132 of the Companies Act, 2013*_
## *Monitoring and Regulating Powers* – recommend CG w.r.t. AS and SAs and checking proper compliance of the same, oversee quality of audit firms.
## *Investigating and Summoning Powers* – Investigation of audit firms, summoning and enforcing attendance, Inspection of records.
## *Penalizing Powers* – Individual Auditors (INR 1 Lakh to 5 times of Fees), Firm of Auditors (INR 5 Lakhs to 10 times of Fees).
## *Debarring Powers* – Debarring from Practice as a member of ICAI for a period of 6 months to 10 years.