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Govt Considers Dividing NFRA's Audit Review and Disciplinary Functions
12 Nov
Summary
- Government weighing splitting NFRA's audit review and disciplinary roles
- Aims to delegate investigation/review to NFRA officials outside executive board
- Changes would require amending the Companies Act
According to official sources, as of November 12th, 2025, the Indian government is weighing a proposal to restructure the National Financial Reporting Authority (NFRA) by dividing its core functions. The plan under consideration would see the NFRA's audit review and disciplinary proceedings handled separately.
Currently, the NFRA executive body is responsible for both reviewing audits and determining any necessary disciplinary actions. However, the Ministry of Corporate Affairs, the nodal ministry overseeing the NFRA, is now exploring the possibility of delegating the investigation and review process to NFRA officials outside the executive board. This would require amending the Companies Act to enable the regulator to divide these duties.
The rationale behind the proposed changes is to streamline the NFRA's operations and create a more efficient system of audit oversight and enforcement. By separating the review and disciplinary functions, the government aims to enhance the NFRA's effectiveness in monitoring financial reporting and taking appropriate action against any violations.
