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Ministry of Corporate Affairs notifies penalty for non-compliance with NFRA Rules

17.06.2022

Ministry of Corporate Affairs has notified that, the non-compliance with the National Financial Reporting Authority Rules (NFRA), 2018 would attract penalty. As per the amendment, whoever contravenes any of the provisions of NFRA Rules, shall be punishable with fine not exceeding five thousand rupees, and where the contravention is a continuing one, with a further fine not exceeding five hundred rupees for every day after the first during which the contravention continues.

The National Financial Reporting Authority (NFRA) was constituted on 01st October,2018 by the Government of India under Sub Section (1) of section 132 of the Companies Act, 2013. As per Sub Section (2) of Section 132 of the Companies Act, 2013, the duties of the NFRA are to:

1. Recommend accounting and auditing policies and standards to be adopted by companies for approval by the Central Government;

2. Monitor and enforce compliance with accounting standards and auditing standards;

3. Oversee the quality of service of the professions associated with ensuring compliance with such standards and suggest measures for improvement in the quality of service;

4. Perform such other functions and duties as may be necessary or incidental to the aforesaid functions and duties.

Sub Rule (1) of Rule 4 of the NFRA Rules, 2018, provides that the Authority shall protect the public interest and the interests of investors, creditors and others associated with the companies or bodies corporate governed under Rule 3 by establishing high quality standards of accounting and auditing and exercising effective oversight of accounting functions performed by the companies and bodies corporate and auditing functions performed by auditors.

Tags : Penalty Non-compliance NFRA Rules

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