According to a notification from the Ministry of Corporate Affairs (MCA), failure to comply with the National Financial Reporting Authority Rules, 2018 will result in a fine of no more than Rs. 5,000. A punishment provision is added to the rules by way of a notification, which also changed the existing regulations.
According to the new regulation, “Anyone who violates any of the terms of these regulations shall be subject to a fine not to exceed five thousand rupees.” Additionally, if the violation is a recurring one, there will be an additional punishment of no more than 500 rupees for each additional day the violation persists.
NFRA was established in 2018 to monitor the professional service quality of employees (such as auditors, CFOs, etc.) and recommend actions needed to raise service quality.
Every auditor is required under the NFRA Rules to submit a return to the Authority on or before the annual due date i.e. 30 November in the format that the Central Government may specify. The ICAI must submit recommendations to the authority about any new proposed accounting standards or auditing standards, as well as any proposed amendments to already existing accounting standards or auditing standards.