NFRA can rule on penal powers

The National Financial Reporting Authority (NFRA) has got a boost to its powers with the Supreme Court allowing the audit regulator to decide on a dispute over its powers to penalize professionals guiding statutory auditors, showed an order from the apex court.

- Gireesh Chandra Prasad

The Supreme Court on 7 March allowed NFRA to pass an order on the matter and disposed of a Delhi High Court order in January that had ruled that NFRA had no powers to penalize these professionals - called 'engagement quality control reviewers' (EQCR).

On NFRA's appeal against the High Court ruling, the apex court said that a professional who was issued show cause notice by NFRA can file their objections to the regulator and if these are filed, NFRA must consider them on both jurisdictional issues and other aspects before passing a well-reasoned order, showed the apex court order seen by Mint.