New Delhi, March 13 A parliamentary panel has suggested that the regulatory body, NFRA, conduct sectoral studies to identify industry-specific accounting and auditing challenges, as well as to establish sector-specific accounting guidance to boost investor confidence.
The National Financial Reporting Authority (NFRA), established by the government in 2018 under the Companies Act, 2013, regulates auditors and monitors compliance with accounting and auditing standards by companies. It also oversees the quality of audit services to ensure reliability in financial reporting.
In a report presented in the Lok Sabha on Thursday, in response to the corporate affairs ministry's demand for grants for 2026-27, the Standing Committee on Finance has made certain recommendations regarding the NFRA.
According to the report, the corporate affairs ministry should take swift steps to separate the functions of audit quality review and disciplinary functions within the NFRA to strengthen procedural clarity, institutional independence, and the credibility of the audit oversight framework.
The panel has recommended that the regulatory body establish a robust data management and monitoring system to track complaints, disciplinary proceedings, and follow-up actions in a structured and transparent manner, enabling effective oversight and timely resolution of cases.
"The committee also recommends that NFRA conduct sectoral studies to identify industry-specific accounting and audit challenges, and, where necessary, develop sector-specific accounting guidance for key sectors such as oil, energy, and insurance," the report said.
The panel stated that such measures would help strengthen transparency, enhance investor confidence, and improve the overall effectiveness of audit regulation and supervision.