"The NFRA is an independent regulator established under Section 132 of the Companies Act, 2013 to oversee the auditing profession". Discuss.

The NFRA is an independent regulator established under Section 132 of the Companies Act, 2013 to oversee the auditing profession. The NFRA has been established as an independent regulators for enforcement of auditing standards and ensuring the quality of audits to strengthen the independence of audit firms and therefore enhance investor and public confidence in financial disclosures of companies. The powers and functions of NFRA are majorly pertaining to oversee the auditing profession that may be studied under the following points- To investigate either suo-motu or on a reference made by the Central Government in matters of professional misconduct committed by any member or Chartered Accountants firm. To make recommendations to the Central Government on formulation and laying down of accounting standards and auditing policies for adoption by companies or their auditors. To monitor and implement compliance relating to accounting standards and auditing policies as prescribed. To oversee the quality of service of professions associated with compliance of accounting standards and auditing policies and suggest measures for improvement. NFRA shall have equivalent powers as a civil court under the Code of Civil Procedure, 1908. It can exercise the powers related to:- discovery and production of books or other documents as specified by NFRA; summoning and enforcing the attendance of persons and examining them on oath; inspection of books, registers and other documents of any person; issuing commissions for examination of witness or other documents. NFRA may impose penalties: not less than one lakh rupees which may extend up to five times of the fees received in case of individuals and not less than ten lakh rupees which may extend up to ten times of the fees received in case of firms. NFRA may consider an investigation based on monitoring and compliance review of auditor or audit firm upon recommendations by Member- Accounting and Member- Auditing. NFRA shall receive a final report from the Committee on Enforcement on matters referred to them and issue a notice in writing to the investigated company or the professional on whom the action is proposed to be taken. NFRA may conduct quality review of the following class of companies:- Listed companies, Unlisted companies having net worth or paid up capital of not less than 500 crores or annual turnover of not less than 1000 crores as on 31st March of immediately preceding financial year, Companies having securities listed outside India. NFRA may debar any member or a firm from engaging himself or itself from practice as a member of the Institute of Chartered Accountants of India for a minimum period of six months which may extend upto ten years on account of proved misconduct. NFRA shall have the power to accept or overrule clarifications received or objections raised in writing. NFRA may investigate against the auditor or audit firms which conducts- audit of 200 or more companies in a year, audit of 20 or more listed companies.