The corporate sector must play a pivotal role in the implementation of India’s vision to become a developed country by 2047, Manoj Govil, Secretary, Ministry of Corporate Affairs (MCA), said on Tuesday.

“This role naturally comes with major responsibility and public accountability. The corporate sector must improve upon the level of public trust to play its rightful role”, Govil said at the National Financial Reporting Authority’s (NFRA) first ever international conference, “Transparent Financial Reporting and Audit Quality: Pillars of Corporate Governance’”.

He underscored the need for structures and frameworks that are sound and robust to protect stakeholders.

In this backdrop, transparent financial reporting and high-quality audits play a crucial role in inspiring investor confidence, facilitating informed decision-making, and fostering a culture of trust and credibility within the business ecosystem. 

Comprehensive review

Govil said that MCA has commenced a comprehensive review of its rules and regulations, as directed by Finance and Company Affairs Minister Nirmala Sitharaman, in her budget speech last year. This review will also cover rules and regulations around auditing and accounting and matters related thereto, he added.

Govil highlighted that India, which is the fifth-largest economy in the world, is well on course to become the third-largest in the next three years and will have a GDP of $5 trillion in a few years. 

“We aspire to gain the status of a developed nation by 2047, when GDP is estimated to touch $30 trillion. For the past few years, the government has been working on a vision and a roadmap to achieve the aspiration of Viksit Bharat by 2047,” he said.

To achieve this milestone, significant reforms have been undertaken in the past few years, and many more are planned, Govil said.

“We remain committed to advancing the agenda of transparent financial reporting and audit quality as integral components and pillars of corporate governance. We will continue to collaborate with stakeholders, leverage technology, and enact progressive reforms to reinforce trust, accountability, and sustainability in the corporate sector,” Govil said.

Govil also said that MCA has in the past few months been engaged with the Institute of Chartered Accountants of India (ICAI) on the issue of realising the Prime Minister’s vision of having India’s own home-grown big audit firms.

With the coming into being of NFRA, the conversations around the ‘Audit Quality’ have indeed deepened and become mainstream, he said.

“Audit quality is now manifested in various orders and inspection reports of NFRA, and with that, the stakeholders, I believe, have a greater understanding of its dimensions and impact. NFRA has contributed immensely to the transparency and accountability of the profession while taking the profession along with it on this journey,” he said.

MCA has been steadfast in its efforts to strengthen regulatory frameworks and enhance compliance standards since the enactment of the Companies Act, 2013, he added.