Consider the following statements about National Financial Reporting Authority NFRA NFRA is to be an...........

Economic Affairs Financial Institutions

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Consider the following statements about National Financial Reporting Authority (NFRA)

NFRA is to be an independent regulator overseeing the auditing profession.

It covers all the listed companies and large unlisted companies.
It is not empowered to impose penalties on erring audit firms.

Which of the statements given above is/are correct?

1 and 2 only

1 only

2 and 3 only

3 only

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Explanation:

The National Financial Reporting Authority (NFRA) was constituted on 01st October,2018 by the Government of India under Sub Section (1) of section 132 of the Companies Act, 2013

The duties of the NFRA are to:

Recommend accounting and auditing policies and standards to be adopted by companies for approval by the Central Government;
Monitor and enforce compliance with accounting standards and auditing standards;
Oversee the quality of service of the professions associated with ensuring compliance with such standards and suggest measures for improvement in the quality of service;
Perform such other functions and duties as may be necessary or incidental to the aforesaid functions and duties.

The NFRA shall have the following powers:

To investigate the matters of professional or other misconduct committed by a prescribed class of CA firms or CAs. No other authority can initiate or continue proceedings where the NFRA has initiated an investigation. Such an investigation can be initiated either suo moto (by itself) or on a reference made by the Central Government.
The same powers as a Civil Court under the Code of Criminal Procedure, 1908, in respect of a suit involving the following matters:
- Discovery and production of books of account and other documents, at such place and time as may be specified by the NFRA
- Summoning and enforcing the attendance of persons and examining them under oath
- Inspection of any books, registers, and other documents of any person at any place
- Issuing commissions for the examination of witnesses or documents
Where professional or other misconduct is proved, it shall have the power to impose the following punishment:
- Penalty:
  - For individuals a fine between Rs. 1,00,000 to 5 times the fees received;
  - For firms a fine Between Rs. 5,00,000 to 10 times the fees received;
- Debarring the member/firm from practice as a member of ICAI between 6 months to 10 years as may be decided