Auditing Standards Clash: NFRA and ICAI Disagree on Key Proposals

The National Financial Reporting Authority (NFRA) proposed revisions to several auditing standards, but the Institute of Chartered Accountants of India (ICAI) representatives disagreed. The revisions pertain to group company audits, quality management, and require ministry approval. The changes aim to address audit deficiencies and align with global standards, effective April 2026.

A recent meeting of the National Financial Reporting Authority (NFRA) board sparked disagreement with representatives from the Institute of Chartered Accountants of India (ICAI) regarding proposed changes to vital auditing standards.

The NFRA proposed revisions to SA 600, aimed at improving audits of group companies, and sought to rename some auditing standards as IndSAs, aligning them with global practices seen in the UK and Australia. ICAI representatives, however, opposed these changes, citing concerns over unnecessary duplication and increased costs.

Despite the disagreement, the NFRA aims to address audit quality issues and proposes to implement the changes by April 2026, pending approval from the corporate affairs ministry. The debate highlights ongoing tensions over alignment with international standards in the auditing field.

(With inputs from agencies.)