NFRA Chairperson Justifies Audit Standards Revision Amid ICAI Opposition

National Financial Reporting Authority (NFRA) Chairperson Ajay Bhushan Pandey has defended the revision of audit standards for group company audits, despite opposition from the Institute of Chartered Accountants of India (ICAI). Pandey emphasized the need to align with global standards to enhance transparency and investor protection. ICAI has raised concerns that the revisions could marginalize smaller audit firms and create duplication of work. The revised standards require group auditors to evaluate the adequacy of work and communication from component auditors, which ICAI fears could lead to audit concentration among larger firms. Pandey refuted these claims, stating that the standards do not mandate principal auditors to perform the work of component auditors. He highlighted that recent corporate frauds exposed gaps in existing auditing standards, and the proposed revisions aim to close these loopholes. The NFRA board has recommended implementing the revised standards from April 1, 2026, pending approval from the Ministry of Corporate Affairs (MCA).