The Centre should “not rush” in setting up of the National Financial Reporting Authority (NFRA), Manoj Fadnis, the newly elected President of the CA Institute has said.

The erstwhile UPA Government had proposed the setting up of NFRA to oversee the overall quality of financial reporting and make recommendations to the government on formulation of accounting and auditing standards.

As a quasi-judicial body, NFRA was expected to also oversee the service quality of the professionals involved in compliance with the auditing and accounting standards.

“We believe NFRA requires some more deliberations and the Government should not rush into its formation”, Fadnis said in his first press conference after assuming charge as CA Institute President

These remarks are significant as the Centre is yet to notify the relevant provision and rules (under the company law) on NFRA.

It remains to be seen if the Modi-led Government would go ahead and implement this provision of the new company law.

The CA Institute has been taking a position that it should continue to set the accounting and auditing standards, which could be approved by NFRA.

The new company law—enacted in 2013—had provided that the Centre will prescribe accounting standards in consultation with, and after examination of, the recommendations made by NFRA.

PRIORITIES

Asked about his priorities during his presidency, Fadnis said efforts would be taken to improve the education and training system.

There will also be efforts to implement the accrual accounting project for Railways.

“I see the proposed MOU with Railways as a prestigious project for us. We want this project to have a demonstrative effect on the Government. The MoU is expected to be signed soon”, he said.  

The CA Institute will also take efforts to encourage small and medium sized practitioners and do some "handholding", if need be.

srivats.kr@thehindu.co.in

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