NFRA Advocates Global Standards to Bolster Homegrown Audit Firms

NFRA Chairperson Ajay Pandey urges adoption of global standards to support homegrown auditing firms. Amid tensions with ICAI over group audit standards, he stresses the need for high-quality frameworks following corporate failures. Standards like ISQM-1 and SA 600 are pivotal for better audit practices.

National Financial Reporting Authority Chairperson Ajay Bhushan Prasad Pandey emphasized the imperative of adopting global standards to nurture India's domestic auditing and accounting firms. This call comes amidst ongoing differences with the Institute of Chartered Accountants of India regarding proposed adjustments to auditing standards, specifically those concerning group audits.

Pandey highlighted a string of corporate failures over the last decade, amounting to approximately Rs 2 lakh crore. He stressed the necessity for high-quality reporting and auditing frameworks to prevent future incidents. In a recent webinar, Pandey reasserted the significance of the International Standard on Quality Management (ISQM), arguing that adherence to such standards is essential for establishing global auditing presence.

Addressing issues related to SA 600, Pandey underlined the ambiguity surrounding the principal auditor's responsibilities in group audits. He encouraged a conformity to global benchmarks to enhance auditing practices and alleviate negligence within the sector. Recent NFRA orders illustrate accountability of auditors for past audit lapses.

(With inputs from agencies.)