Active Stocks
Sat Mar 02 2024 12:49:58
  1. Tata Steel share price
  2. 155.15 3.43%
  1. HDFC Bank share price
  2. 1,430.35 -0.06%
  1. State Bank Of India share price
  2. 773.05 0.49%
  1. Tata Motors share price
  2. 988.40 1.15%
  1. Wipro share price
  2. 522.65 0.67%
Business News/ Industry / NCLAT upholds NFRA's retrospective authority
BackBack

NCLAT upholds NFRA's retrospective authority

The decision came as the principal bench of the NCLAT dismissed appeals from branch auditors of a non-bank lender which was later acquired by another group through a court-supervised debt resolution plan

The NCLAT's ruling supported the disciplinary actions taken by the audit watchdog against four individual auditorsPremium
The NCLAT's ruling supported the disciplinary actions taken by the audit watchdog against four individual auditors

New Delhi: The National Company Law Appellate Tribunal (NCLAT) has confirmed the retrospective power of the National Financial Reporting Authority (NFRA) over audits conducted before it was set up in 2018. 

This decision came on Friday as the principal bench of the NCLAT dismissed appeals from branch auditors of a non-bank lender, which was later acquired by another group through a court-supervised debt resolution plan approved by various regulators.

The NCLAT's ruling supported the disciplinary actions taken by the audit watchdog against four individual auditors, reinforcing the mandatory nature of auditing standards, even in branch audits. Mint has seen a copy of the order.

The NFRA had previously penalized these auditors for professional misconduct.

The tribunal emphasized the critical role of auditors in scrutinizing management statements and maintaining strict adherence to auditing standards. Any violations could lead to penalties and punishment. The tribunal stressed the importance of auditors, recognizing their responsibilities to both the company and the public.

"We feel that it is of utmost importance that auditors realise their responsibilities which is necessary not only to the company but also to the public," the appellate tribunal order said.

The enforcement of NFRA's disciplinary orders was quintessential to make the public aware and enable them to make informed and sound financial decisions and investments, the appellate tribunal noted.

The enforcement of NFRA's disciplinary orders was essential for public awareness and informed financial decision-making. 

The tribunal warned that any deviation could adversely impact the economy and harm shareholders, banks, lenders, and creditors. 

"NFRA, as an independent audit regulator has been entrusted by the Parliament after great debate for protecting public interest including of the creditors by exercising effective oversight over accounting and auditing functions," the apellate tribunal said. 

It also ruled that it did not find any error in NFRA's orders and dismissed the appeals calling them devoid of merit.

 

 

Unlock a world of Benefits! From insightful newsletters to real-time stock tracking, breaking news and a personalized newsfeed – it's all here, just a click away! Login Now!

ABOUT THE AUTHOR
Gireesh Chandra Prasad
Gireesh has over 22 years of experience in business journalism covering diverse aspects of the economy, including finance, taxation, energy, aviation, corporate and bankruptcy laws, accounting and auditing.
Catch all the Industry News, Banking News and Updates on Live Mint. Check all the latest action on Budget 2024 here. Download The Mint News App to get Daily Market Updates.
More Less
Published: 03 Dec 2023, 10:38 AM IST
Next Story footLogo
Recommended For You
Switch to the Mint app for fast and personalized news - Get App