Newly formed  National Financial Reporting Authority to audit IL&FS books

The MCA counsel had also urged the NCLT to appoint an independent chartered accountant to take a closer look at the accounts and revise the balance sheets of all the three companies.

Published: 25th December 2018 06:08 AM  |   Last Updated: 25th December 2018 06:08 AM   |  A+A-

Express News Service

NEW DELHI: The newly constituted National Financial Reporting Authority (NFRA) would soon test its waters, with the Central government planning to assign it the task of auditing last five years’ books of accounts of the fraud-hit Infrastructure Leasing and Financial Services Ltd (IL&FS).

“ICAI (Institute of Chartered Accountants of India) has done its primary investigation and the ministry (of corporate affairs) had already placed its request to reopen the books of accounts of the IL&FS. While the process of appointing an independent professional for the purpose is on, the general consensus is that the task should be done under the aegis of NFRA,” a senior official from the Ministry of Corporate Affairs (MCA) told TNIE.

On Friday, the MCA had moved a petition before the National Company Law Tribunal (NCLT) seeking its approval to reopen accounts of three entities — IL&FS, IL&FS Transportation Networks Limited, IL&FS Financial Services Limited —invoking Section 130 of the Companies Act for the first time.

The MCA counsel had also urged the NCLT to appoint an independent chartered accountant to take a closer look at the accounts and revise the balance sheets of all the three companies.

The MCA wants NFRA to oversee the investigation and to scan last five years’ accounts of the companies.
Post the Punjab National Bank scam that questioned the role of auditors, the Union Cabinet had, on March 1, approved setting up of an independent regulator (NFRA), which will have sweeping powers to act against erring auditors and auditing firms.

In November, the Centre had notified NFRA rules, which said it will oversee the quality of service and investigate the roles of auditors of listed entities, as well as auditors of unlisted entities with paid-up capital of not less than Rs500 crore or annual turnover of over Rs1,000 crore, thus clipping ICAI’s monitoring and disciplinary powers over auditors.

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