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NFRA looks to enhance communication between auditors and audit panels
- Business Standard |
- Economics (Macroeconomics) |
- 2025-01-10
- Corporate Governance
- National Financial Reporting Authority (NFRA)
The National Financial Reporting Authority (NFRA) released the first part of the Auditor-Audit Committee Interaction Series to enhance communication and audit quality. It focuses on improving interactions between auditors and audit committees, referencing key auditing standards.
NFRA's Auditor-Audit Committee Interaction Series
The National Financial Reporting Authority (NFRA) has launched the first part of its Auditor-Audit Committee Interaction Series aimed at enhancing communication between auditors and audit committees, thereby improving audit quality.
Importance of Communication
- NFRA emphasizes the significance of communication between auditors and those charged with governance (TCWG).
- The initiative draws on requirements from various standards and the Companies Act, 2013.
Key Focus Areas
- Auditors should be prepared for questions on:
- Accounting estimates and judgments.
- Audit of expected credit losses as per Ind AS 109, Financial Instruments.
- Enhancement of audit quality and promotion of accounting and auditing standards.
Effective Two-Way Communication
- NFRA Chairman highlighted the need for robust interaction between TCWG and auditors.
- Audit committees and independent directors should:
- Ask auditors pertinent questions.
- Maintain professional skepticism.
- Not accept information passively.
Such communication is expected to enhance stakeholder and shareholder confidence in corporate financial statements.