CA Institute lashes out at NFRA over TAC report
K.R. Srivats New Delhi | Updated on September 15, 2021
Nihar N Jambusariya, President, CA Institute
ICAI says the financial reporting authority not a ‘super regulator’ of the profession
It’s official. Two audit regulators — ICAI and NFRA — are daggers drawn, and in public too, with the CA Institute rejecting outright the Technical Advisory Committee (TAC) report of March 2021.
It maybe recalled this report — the first TAC, with recommendations on Enhancing Engagement with Stakeholders — had formed the basis for the National Financial Reporting Authority (NFRA) coming out with a consultation paper on this issue in June.
‘Far from ground realities’
In a tersely worded letter sent along with nearly 120 pages of detailed comments on the NFRA consultation paper, CA Institute President Nihar N Jambusariya conveyed that ICAI was “outright rejecting” the report and expressed serious concern over the “one sided surrealism” of the TAC report.
Jambusariya also said the paper’s fallacious circular argument analogies, references and hence inferences made were far from the ground reality in many matters.
The ICAI wanted the TAC report scrapped, saying it was based on the views of a miniscule set of stakeholders who responded to a questionnaire. The report has to be redrafted based on the views of a large sample set of stakeholders, the ICAI said.
This, the ICAI said, would ensure that comments are backed by proper research-based evidence rather than simply stating the arbitrary and ex-facie opinions that suffer from a distorted understanding and bias.
“…the objective of both the NFRA and the ICAI is to work for common public good and not as competing entities, still it has been seen that a rather non-collaborative approach is being adopted by NFRA and the way in which the TAC report and the consultation paper is worded, wherein NFRA has also given its preliminary view in the said report, it seems that NFRA feels that for so many years there was no regulator for accounting and auditing profession,” the ICAI President’s July 9 letter to NFRA said.
Mandate of NFRA
On Monday, NFRA made public all the responses it received on its consultation paper on ‘Enhancing engagement with stakeholders, including those from the CA Institute’.
In his letter, the ICAI President also reiterated that the mandate of NFRA as per Companies Act 2013 is of a consulting body, which has to run in congruence with ICAI’s overall objective of regulation and development of CA profession and not to act as a “super regulator” affecting the overall growth of the CA profession.
Jambusariya said the “damaging” report from TAC can harm the image of the CA profession. The report may also harm national interest due to change in investment rating and other parameters that the World Bank considers when preparing the ‘Ease of Doing Business’ report, the letter added.
The ICAI said that it could have been consulted for a better understanding of the current dynamics instead of directly putting the views of the NFRA in public domain for stakeholder and public comments.
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