NFRA Proposes Auditing Standards for LLPs: A New Era of Financial Transparency

The National Financial Reporting Authority (NFRA) plans to apply auditing standards to Limited Liability Partnerships (LLPs). These standards, previously set for companies, await government approval. Despite opposition from the Institute of Chartered Accountants of India, the move signifies a step towards enhanced financial oversight.

The National Financial Reporting Authority (NFRA) aims to extend its auditing norms to Limited Liability Partnerships (LLPs), in a significant move towards financial transparency announced on Monday.

The NFRA previously finalized 40 Standards of Auditing (SAs) alongside related Standards on Quality Management (SQM) for companies. These are proposed to be applicable to LLPs, pending government approval by April 2026. This development comes after a pivotal regulatory meeting held on November 11-12.

Despite opposition from the Institute of Chartered Accountants of India (ICAI), the NFRA's proposal was supported by seven out of eight members, including significant representatives from the Comptroller and Auditor General (CAG), the Reserve Bank of India (RBI), and independent experts.

(With inputs from agencies.)