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Supreme Court permits NFRA to investigate CAs; but Limits Final Orders<\/strong><\/p>\n To enhance the governance of India\u2019s audit and accounting system, the Supreme Court has allowed the National Financial Reporting Authority (NFRA) to continue proceedings against Chartered Accountants (CAs) and audit firms for disciplinary cases even in cases where no Audit Quality Review Reports (AQRRs) have been prepared and final orders have not yet been issued.<\/p>\n However, Sanjay Kumar and Sanjiv Khanna, the Chief Justices, have said that making the final decision would not be in the hands of the NFRA, and if the final order is already made by the NFRA in any case, it will not be implemented until further instructions are given by the Court.<\/p>\n The Supreme Court\u2019s decision came after NFRA appealed against a ruling of the Delhi High Court (HC) by Justices Yashwant Varma and Dharmesh Sharma, which pointed out that NFRA didn\u2019t have separate divisions for checking audit quality and taking disciplinary actions against auditors. Due to this, the High Court asked for 11 cases to be reviewed again, questioning NFRA\u2019s approach. However, in the Supreme Court, NFRA argued that the Delhi HC decisions were contradicting the judgements made earlier by the National Company Law Appellate Tribunal (NCLAT) and the SC.<\/p>\n NFRA mentioned the Supreme Court\u2019s judgement in the case of T.K. Harish, who was the branch auditor of Dewan Housing Finance Corporation Ltd. (DHFL). This case itself is a big financial scam, where authorities are investigating the misuse of Rs.31,000 crore of public funds, along with bank fraud of Rs.3,700 crore.<\/p>\n In its appeal in the case of auditor Snehal N. Muzoomdar, NFRA has insisted that the Delhi HC decisions had an anomalous situation, where the proceedings and order passed in the case of one branch auditor have been upheld by SC.<\/p>\n As the case continues, everyone will be waiting for the Supreme Court\u2019s final decision, which could change the rules and powers of the NFRA and affect how chartered accountants and audit firms follow the law.<\/p>\n<\/div>\n Join StudyCafe Membership. For More details about Membership Click Join Membership Button<\/p>\n Join Membership<\/a><\/p>\n In case of any Doubt regarding Membership you can mail us at [email\u00a0protected]<\/span><\/a><\/p>\n<\/div>\n Join Studycafe’s WhatsApp Group or Telegram Channel for Latest Updates on Government Job, Sarkari Naukri, Private Jobs, Income Tax, GST, Companies Act, Judgements and CA, CS, ICWA, and MUCH MORE!”<\/p>\n<\/div>\nLegal Battle Between NFRA and Delhi High Court<\/h3>\n
NFRA highlights T.K. Harish\u2019s DHF Audit Case<\/h3>\n