NFRA: National Financial Reporting Authority

NFRA can already bar an auditor from practice for ten years. In 2026, Parliament decided that still wasn’t enough.

Timeline

• 1 March 2018: The Union Cabinet approves NFRA’s establishment, under Section 132 of the Companies Act, 2013.
• 1 October 2018: NFRA is constituted; R Sridharan becomes its first Chairperson.
• 23 July 2025: Nitin Gupta assumes charge as NFRA’s Chairperson.
• 23 March 2026: The Corporate Laws (Amendment) Bill, 2026 is introduced, expanding NFRA’s powers.

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Indian Economy · IndEco0234

NFRA

National Financial Reporting Authority

1 Mar 2018

Union Cabinet approves NFRA’s establishment.

1 Oct 2018

NFRA is constituted; R Sridharan is its first Chairperson.

23 Jul 2025

Nitin Gupta assumes charge as NFRA’s Chairperson.

23 Mar 2026

Corporate Laws (Amendment) Bill, 2026 expands NFRA’s powers.

From Watchdog to Enforcer

NFRA could already fine and debar auditors. The 2026 Bill adds criminal consequences for ignoring its orders, and formally makes it a statutory body corporate with perpetual succession.

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Must Know

• NFRA stands for the National Financial Reporting Authority.
• It is a statutory body, constituted under Section 132 of the Companies Act, 2013.
• NFRA regulates the auditing profession, and India’s accounting standards.
• It can investigate auditors, and impose penalties or debarment, for professional misconduct.
• NFRA is headquartered in New Delhi.

Good to Know

• NFRA was constituted on 1 October 2018, months before the IL&FS crisis exposed serious audit lapses.
• R Sridharan, a former IAS officer, served as NFRA’s first Chairperson.
• NFRA oversees listed companies, and large unlisted public companies, including banks and insurers.
• It can debar an auditor from practice, for up to 10 years.
• NFRA was set up partly to end the chartered accountants’ body ICAI’s self-regulation of audits.

Test Yourself

Please wait…

1. NFRA is a statutory body, constituted under which section of the Companies Act, 2013?

Section 132

Section 149

Section 143

Section 245

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Great to Know

• In 2024, NFRA fined Coffee Day Enterprises’ auditors. It debarred two chartered accountants for up to 10 years.
• Nitin Gupta, a former CBDT Chairman, assumed charge as NFRA’s Chairperson on 23 July 2025, for a three-year term.
• The Corporate Laws (Amendment) Bill, 2026 was introduced in Lok Sabha on 23 March 2026.
• The Bill formally recognises NFRA as a statutory body corporate, with perpetual succession.
• It also lets NFRA issue advisories, censures, and warnings, besides penalties and debarment.

Current Affairs

• 2025-2026: NFRA gets new leadership, and a stronger legal mandate.
  • Nitin Gupta assumed charge as Chairperson on 23 July 2025, alongside three new full-time members.
  • The Corporate Laws (Amendment) Bill, 2026 grants NFRA a wider enforcement toolkit, including mandatory training orders and referrals to the Central Government.
  • The Bill introduces criminal consequences, for failing to comply with NFRA’s directions or pay its penalties.