Parliament panel urges NFRA to study sector-specific audit issues

New Delhi, Mar 13, 2026

A Parliamentary panel has suggested that regulator NFRA conduct sectoral studies to identify industry-specific accounting and auditing challenges as well as put in place sector-specific accounting guidance to help boost investor confidence.

The National Financial Reporting Authority (NFRA), set up 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 tabled in the Lok Sabha on Thursday on the corporate affairs ministry's demand for grants 2026-27, the Standing Committee on Finance has made certain recommendations in relation to the NFRA.

According to the report, the corporate affairs ministry should take expeditious steps to operationalise the separation between 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 watchdog establish a robust data management and monitoring system to track complaints, disciplinary proceedings, and follow-up actions in a structured and transparent manner to enable effective oversight and timely resolution of cases.

"The committee also recommend that NFRA undertake 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.

Such measures, the panel said, would help strengthen transparency, enhance investor confidence and improve the overall effectiveness of audit regulation and supervision.

[Press Trust of India]