The National Financial Reporting Authority (NFRA) is set to begin its first annual inspection of key audit firms, including the Big Five, by April. The inspection will focus on evaluating their processes, standards, and compliance with suggestions made in the NFRA’s December 2023 reports. The regulator will also select other auditors for inspection based on risk-based parameters finalized using data analytics. Emphasis will be placed on the effective communication between auditors and the audit committees of listed firms. This increased regulatory scrutiny aims to ensure that auditors follow both the letter and the spirit of the law, bolstering the audit and accounting ecosystem to prevent corporate fraud and safeguard shareholders’ interests in a rapidly growing economy. The Big Five dominate the Indian audit ecosystem and oversee assignments for a significant portion of Nifty-500 companies. Following the inspections, audit firms will be given time to submit their views on the findings before the reports are made public.
NFRA Announces First Annual Inspection of Key Audit Firms start by April
