NFRA to clarify on past audit jurisdiction soon

The clarification seeks to address stakeholders' concerns over an SC ruling

- Gireesh Chandra Prasad

The National Financial Reporting Authority (NFRA) will soon offer clarity on its authority to review the statutory audits of companies conducted before its establishment on 1 October 2018.

The clarification will address concerns of stakeholders following a Supreme Court ruling on Monday dismissing a petition which raised questions on the watchdog’s retrospective jurisdiction, a person aware of the development said.

The watchdog will dispel doubts about its jurisdiction for past periods, and clarify the extent of regulatory oversight of statutory auditors in the country.

Last month, the Bombay High Court instructed NFRA to hear the case of Chaturvedi & Shah LLP, the statutory auditor for Dewan Housing Finance Corp. Ltd, for 2017-18. The firm had challenged NFRA’s jurisdiction for periods predating its creation, following an audit quality review of the financial institution conducted by the audit regulator.