After the Punjab National Bank(PNB) scam of over 1000 crores, along with information came out of other bank scams in India, Government of India had announced the introduction of NFRA, i.e, National Financial Reporting Authority(Section 132 of The Companies Act,2013).
This body will check the practices of Chartered Accountants and Firms.
The major point to be noticed that its bill was passed by Parliament of India on 2013. But due to opposition by ICAI(Institute of Chartered Accountants of India), it didn’t came in existence.
Today most of the countries have moved from Self-regulatory bodies to the independent bodies with relation to auditing practices.
The independent bodies like NFRA have power to investigate the work of CAs and firms and even impose penalty or debarring the CAs or firm to practice for period as described in provision of The Companies Act, 2013.
However it is clarified in the announcement by honourable Finance Minister Arun Jaithley in press, that ICAI will continue to hold the routine disciplinery works. Also ICAI will look after the acts of CAs and firms in case of auditing in Small companies. Whereas NFRA will take care of reporting of listed and large companies.