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NFRA Chair: Shared Duty for Accurate Financial Reports
27 Oct
Summary
- Audit reliability hinges on auditor quality for lender due diligence.
- Financial reporting quality is a shared responsibility among many stakeholders.
- NFRA aims to boost audit quality through inspections and support for smaller firms.
Nitin Gupta, chairperson of the National Financial Reporting Authority (NFRA), emphasized that audit quality is crucial for the reliability of financial information used by lenders, though it does not substitute for their own due diligence. He stated that ensuring high-quality financial reporting is a collective responsibility, involving management, internal auditors, audit committees, external auditors, and regulators.
Gupta explained that NFRA is implementing various measures to improve audit quality nationwide. These include inspections and enforcement actions, alongside workshops and practical toolkits designed to assist smaller and mid-sized audit firms in adopting updated auditing and accounting standards. The authority also scrutinizes the impact of technology, including AI, on auditing practices.
Looking ahead, Gupta linked robust financial reporting to India's ambitious development goals, such as Viksit Bharat 2047. He noted substantial capital expenditure and funding requirements, projected to be largely channeled through the BFSI sector, underscoring the need for transparent and reliable financial data to guide investment and capital formation.
