breaking news National Financial Reporting Authority to introduce annual transparency reporting requirement for audit firms

The watchdog has published draft requirements for auditors and audit firms to follow when preparing annual transparency reports (ATRs).

According to the NFRA, the effort aims to improve transparency in the management and governance of audit firms and their internal policy framework to ensure high quality audits and prevent conflicts of interest by maintaining independence. .

“It is proposed to implement the ATR requirements in a phased manner for Public Interest Entities (PIEs) starting with the auditors of the top 1,000 listed companies (by market capitalization) beginning with the fiscal year ending on March 31, 2023,” the regulator said. said in a statement.

An audit firm will be required to publish the ATR within three months of the end of each fiscal year.

“Transparency report containing certain critical information on the auditor’s operational activities, management, governance and ownership structures, as well as policies and procedures necessary to conduct high quality audits, etc. The information contained in the ATR will be useful to investors, audit committees, directors and the general public,” the statement said.

Public comments were invited on the draft requirements until February 16.

NFRA noted that the proposed ATR requirements are consistent with contemporary international best practices implemented by some leading independent audit regulators in other jurisdictions.

“Indian companies have become important components of the global economy and India has emerged as a global center of excellence in providing financial reporting and auditing services to a large number of multinational corporations, which is arousing expectations of strong, high-quality codes and practices comparable to global benchmarks,” he added.