ICAI has indirectly opposed the setting up of a super regulator National Financial Reporting Authority (NFRA) to regulate the CA profession.
“ICAI supports every effort of strengthening the existing mechanism. But the model of oversight mechanism on the pattern of overseas regulations like Sarbanes Oxley Act 2002 (or SOX) has been found to be ineffective in so far in back-drop of banking sector mortgage scams in the US (in) 2008-2009,” the CA regulator said in a statement.
Currently, the ICAI is tasked with regulating the accounting profession and formulating accounting standards.
In 2012, the Parliamentary Standing Committee on Finance had identified the need for a quasi-regulatory body for supervising the quality of audit. It had suggested that the National Advisory Committee on Accounting and Auditing Standards (NACAAS) should be renamed as NFRA. And that its brief should include setting accounting and auditing standards, monitoring and enforcing their compliance and overseeing the accounting profession.
The Companies Act, 2013 includes this brief in the form of Section 132; only, it hasn’t been notified as yet.