The National Financial Reporting Authority (NFRA) is established under Section 132 of the Constitution to oversee accounting and auditing standards in India. It has powers to monitor compliance, investigate misconduct, and impose penalties, and is composed of a chairperson and up to 15 members appointed by the central government. NFRA must maintain records, prepare annual reports, and its accounts are subject to audit by the Comptroller and Auditor General.

1. NFRA – NATIONAL
FINANCIAL REPORTING
AUTHORITY
SECTION 132

2. CONSTITUTION OF NFRA
• CG may by notification
• Constitute a NFRA
• To provide for matters relating to accounting and auditing standards under this
act

3. FUNCTIONS OF NFRA
• Make a commentation to CG on the formulation and laying down of accounting
and auditing policies and standards
• Monitor and enforce the compliance with accounting standards and auditing
standards
• Oversee the quality of service of profession associated with ensuring compliance
with search standards and suggest measures for improvement in quality of
service
• Perform such other functions as may be prescribed

4. CONSTITUTION OF NFRA
• Consists of chairperson appointed by CG having eminence and expertise in
accountancy, auditing, finance or law
• Search Aadhaar part time and full time members not exceeding 15 as may be
prescribed
• the terms and conditions and the manner of appointment of the chairperson and
members shall be such as may be prescribed
• chairperson and member shall make a declaration to CG in prescribed form
regarding no conflict of interest or lack of independence in respect of his or her
appointment
• Such chairperson and members shall not be associated with audit firm during the
course of appointment or after 2 years of ceasing to hold such appointment

5. POWERS OF NFRA
• Have the power to investigate either suo moto on reference made by CG into the
matters of professional or other misconduct committed by any member or form of
chartered accountants. where is NFRA has initiated an investigation, no other
institute or body shall initiate or continue any proceedings in such matters of
misconduct
• Have same powers as vested in civil court under code of civil procedure 1908, namely
• discovery and production of books of accounts and other documents
• summoning and enforcing the attendance of persons and examining them
• inspection of books registers and other documents at any place
• . Issuing commissions for examination of witness or documents

6. POWERS OF NFRA
• Where professional or other misconduct is proved, make order for
• Imposing penalty of not less than 1 lac which may extend to 5 times of the fees
received in case of individuals and not less than 5 lacs which may extend to 10
times of the fees received in case of firms
• debarring the member or firm from engaging himself or itself from practice as
member of ICAI For a minimum period of 6 months for search hire period not
exceeding 10 years as decided by NFRA

7. OTHER PROVISIONS RELATING TO NFRA
• Any person aggrieved by the order of inequality can file an appeal before the
appellate tribunal in such manner and on payment of such fees
• NFRA shall meet at such time and place and shall observe and discuss about the
transactions of its business at its meetings in such manner as may be prescribed
• CG may appoint secretary or other employees for addition function of enough and
terms and conditions of services of such secretary or employee shall be such as may
be prescribed
• head office of the NFRA shall be at New Delhi and meet at such other place in India
as it may deem fit

8. OTHER PROVISIONS RELATING TO NFRA
• NFRA shall maintain its books of accounts in such a manner as CG may, in
consultation with C & AG prescribe.
• The accounts of the NFRA shall be audited by comptroller and auditor General
and such accounts along with the audit report shall be forwarded to CG annually
• NFRA shall prepare its annual report giving ya full account of activities during the
financial year and forward a copy thereof to CG and CG shall cause the annual
report and audit report given by the comptroller and auditor General of India to
be laid before each house of the parliament