Integrated regulation must: Sridharan
National Financial Reporting Authority (NFRA) Chairperson R. Sridharan on Thursday pitched for a ‘standalone legislation’ for the regulator in the interests of autonomy, and emphasisedall necessary penal provisions relating to financial reporting should be consolidated and vested with it.
The NFRA may take action against auditors for professional misconduct but when it came to other functionaries of a company who have the responsibility for financial reporting, penal powers continue to be vested with the Centre, he said. “To enhance the effectiveness of the implementation of the law, it is necessary to consolidate… penal provisions relating to financial reporting and to vest them in NFRA. This will allow for integrated regulation of all participants in the financial reporting system,” he said.
Noting that the NFRA operated under a single section of the Companies Act, he said the section did not provide comprehensive coverage of all the functions and powers that are required to constitute the authority as a ‘corporate financial reporting regulator’.
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