The National Financial Reporting Authority (NFRA) is open to the idea of making auditors’ filings public and would examine the extent to which they can be put in the public domain.
This is, however, without violating any confidentiality stipulations that may be in force, NFRA said in a recent consultation paper on enhancing engagement with stakeholders. Stakeholders can send in their comments on the consultation paper to NFRA by July 10.
However, NFRA, which considers itself to be the first independent accounting and audit regulator in the country, has rejected its Technical Advisory Committee (TAC) recommendation that NFRA must set up a database service similar to SEBI’s EDIFAR ( now not available) or the SEC’s EDGAR for the filings with the Authority.
TAC recommendations
In its preliminary views on the TAC recommendation, the NFRA pointed out that companies are required to file, on a periodic basis, certain important information, and documents useful to the public, with the Ministry of Corporate Affairs, Securities and Exchange Board of India and stock exchanges. However, NFRA feels that creation of multiple databases in the public domain, covering the same areas, may not be beneficial to users and it could cause confusion.
“As far as the filings by auditors are concerned, NFRA will examine the extent to which they can be put in the public domain, without violating any confidentiality stipulations that may be in force,” NFRA said.
TAC had recommended making auditors’ and preparers’ filings with NFRA available to the public. The committee suggested that easy access to data would enable research in accounting and auditing. In addition, NFRA may commission research on topics of interest and publish the results as working papers or discussion papers, TAC had suggested.
Commenting on NFRA’s stance, Ashok Haldia, former Secretary of CA Institute, said that creation of database for audit filings like auditors’ report — which are otherwise required to be filed as corporate filing on the portals of MCA, SEBI , NSE or BSE or otherwise to be made available in public domain — is a good idea.
“But this should not extend to other filings like audit papers. Further NFRA should not create a separate data base it should rather help augment the data base of above authorities,”Haldia told BusinessLine .
Roadmap
NFRA has in the consultation paper accepted the TAC recommendation that the Authority must develop a roadmap to guide its direction and activities and convey its priorities to stakeholders. Accordingly, NFRA said it will develop a strategic plan covering five years say 2022-27. The overall theme will be “institutional development for delivering on NFRA’s mandate.”
Also, this strategic plan will be separately published for public comments and feedback. An operating plan is also proposed to be developed to achieve the goals and priorities set in the Strategic Plan.