NFRA Chairperson’s three Mantras for ensuring transparency and good governance
The National Financial Reporting Authority (NFRA) plays a pivotal role in upholding transparency and good governance in financial reporting. This report explores the three key mantras articulated by the NFRA Chairperson, Dr.Ajay Bhushan Pande to foster transparency and good governance in the financial sector.
Diligence in Statutory Auditors Appointments: The first mantra underscores the importance of independence and careful consideration when appointing statutory auditors. Dr.Pandey emphasizes strict compliances with section 144 of Companies Act and code of ethics, not merely in form but in substance as well.
Empowering Auditors and Strengthening Engagement: The second mantra encourages a deeper and continuous engagement between boards, audit committees, and auditors. Dr.Pandey, encourages auditors to ask questions and emphasis on asking the auditors to give evidence as to how they have done the sampling, how they have verified the chosen transactions as well as how they have challenged the figures given by the CFOs and their teams.
Embracing Technology: To improve transparency and governance, Dr.Pandey emphasizes the need to embrace technological innovations. Doing so will help prevent fraud, generate early warning signals, and ensure good governance. It will also help to build trust among investors and other stakeholders in India’s capital markets. This comprises of Incorporating technology, data analytics, machine learning to identify early warning signals and efficient use of technology for Income tax and GST compliance.
SW Point of View:The NFRA Chairperson’s three mantras form a robust framework for navigating the intricacies of financial reporting. By emphasizing regulatory oversight, increasing engagement, and technological innovation, the NFRA aims to fortify the foundations of transparent and accountable financial practices in the ever-evolving economic landscape. This holistic approach aligns with the evolving needs of India’s capital markets, instilling trust among the investors and shareholders alike.