National Financial Reporting Authority Rules
National Financial Reporting Authority is a body proposed in Companies Act, 2013 for the establishment and enforcement of accounting and auditing standards and oversight the work of auditors.
The Authority shall have power to monitor and enforce compliance with accounting standards and auditing standards, oversee the quality of service or undertake investigation of the auditors of the following class of companies and body corporate, namely:
1. companies whose securities are listed on any stock exchange in India or outside India
2. All unlisted public companies having
As on 31st March of the immediately preceding financial year.
3. All Banking, Insurance and Electricity companies.
4. Any Body Corporate or Company or Person (Auditor) on a reference made to the Authority by the Central Government in public interest
5. Foreign Subsidiary or Associate Company of any Indian Company as mentioned in point (1) to (4) if the income or net worth of such foreign subsidiary or associate company exceeds 20% of the consolidated income or networth of such above mentioned Indian company
As per Rule 3(2) of NFRA Rules, 2018) Every existing body corporate other than a company governed by these rules, shall inform the Authority within thirty days of the commencement of these rules, (By MCA Notification date is extended by 30 days from the date of deployment of Form) in *Form NFRA-1, the particulars of the auditor as on the date of commencement of these rules.
However, MCA clarify by its Notification dated 13/12/2018 that NFRA-1 is required to be filled by Every Body Corporate governed by these rules other than companies referred under Section 2(20) i.e., NFRA-1 is required to be filled by Body corporate incorporated/registered outside India which is subsidiary or associate Co. of Co. or body corporate incorporated or registered outside India. If the Income/Networth of such subsidiary or associate exceeds 20% of the Consolidated income/Networth of that company
As per Rule 3(3) Every body corporate, other than a company as defined in clause (20) of section 2, formed in India and governed under this rule shall, within fifteen days of appointment of an auditor under sub-section (1) of section 139, inform the Authority in *Form NFRA-1, the particulars of the auditor appointed by such body corporate
Every auditor referred to in rule 3 shall file a return with the Authority on or before 30th April every year in such form as may be specified by the Central Government. Here, Auditor means auditor as defined in section 139 i.e., statutory auditor (i.e., Annual return is not required to be filled with Secretarial Auditor and Cost Auditor)