Pandey acknowledged that many auditors are performing well. Credit: Owlie Productions/Shutterstock.

Ajay Bhushan Prasad Pandey, the chairperson of India’s National Financial Reporting Authority (NFRA), recently highlighted the significant improvements in auditing standards over the past few years, as reported by Press Trust of India. 

Pandey emphasised the importance of board and audit committee members engaging with auditors to raise red flags and prevent corporate failures.  

The NFRA, established in October 2018, has issued more than 80 orders addressing lapses in cases. 

Pandey acknowledged that many auditors are performing well but noted that a section of auditors and board members remain less sensitive and alert, contributing to corporate failures.  

He said: “Overall, auditing of companies has improved over the last 3-4 years.” 

He highlighted the responsibilities placed on auditors and board members by the Securities and Exchange Board of India and the Companies Act, 2013. 

How well do you really know your competitors?

Access the most comprehensive Company Profiles on the market, powered by GlobalData. Save hours of research. Gain competitive edge.

Company Profile – free sample

Thank you!

Your download email will arrive shortly

Not ready to buy yet? Download a free sample

We are confident about the unique quality of our Company Profiles. However, we want you to make the most beneficial decision for your business, so we offer a free sample that you can download by submitting the below form

By GlobalData
Visit our Privacy Policy for more information about our services, how we may use, process and share your personal data, including information of your rights in respect of your personal data and how you can unsubscribe from future marketing communications. Our services are intended for corporate subscribers and you warrant that the email address submitted is your corporate email address.

Auditing standards mandate two-way communication between auditors and Those Charged With Governance (TCWG).  

Pandey pointed out that in many cases handled by the NFRA, audit committees failed to engage with auditors and ask pertinent questions.  

He further noted: “There should be a two-way communication between auditors and TCWG. The audit committee members are part of the TCWG and therefore they also have to understand their responsibilities like what questions should be asked to the auditors.” 

To prevent recurrence, Pandey stressed the need for both auditors and TCWG to be aware of their responsibilities. 

Pandey also underscored the necessity to enhance auditors’ capabilities.  

The NFRA, in collaboration with the Indian Institute of Corporate Affairs, plans to introduce courses to upgrade auditors’ knowledge, especially for those auditing large, listed companies.  

A four-month course for audit committee members has already commenced.