Section 132 of the Companies Act, 2013 – NFRA provisions
Arjun
(A) — (talking on phone to some CA friend).
Oh! So you mean to say, all power’s of our Institute for disciplinary
matters have gone away? That means, it will be handled by Government officials?
(waits for response from that friend).
Baap re! Mar gaye! We are already tired of facing the revenue
authorities ………… (again a response from the other person)
Oh My God! You also don’t know much? Don’t worry. I will understand from Bhagwan Shrikrishna
right now! HE is here.
Shrikrishna
(S) — Cool down, Arjun. Don’t get hyper. You are a professional.
A — As usual, Bhagwan,
You came at the right time! I thought of You and You arrived.
S — You are my most favourite
friend and devotee! What are you worried about?
A — I don’t understand these new
NFRA rules. I feel like closing down the practice.
S — So much panic? And that too
without understanding the so called new Rules! It is unbecoming of a
professional.
A — What else can we do? My
friend says – now our misconduct cases will be handled by NFRA. Our Institute
has lost control over disciplinary cases!
S — NFRA?
A — Yeah! That National
Financial Reporting Authority! The name NFRA sounds like Nafrat!
S — Oh, you are talking about
Section 132 of Companies Act! Have your read it?
A — No! Who has time to read
such things? Here, we are simply fire-fighting with compliances and scrutiny
hearings!
S — Then do read it. Most of
your fear will go away.
A — How do you say so? Somebody
told me that at present, our Council Members in the Disciplinary Committee
understand the practical difficulties of our profession. We don’t know what
these Government guys will do! They will simply harass us; and I don’t know
what they will expect!
S — But why don’t you think of
not committing any misconduct in the first place? Prevention is better than
cure.
A — I agree. But you are aware
how our CAs are unnecessarily dragged into the disciplinary cases. There are
disputes between two parties and CAs are made scapegoats.
S — That I know. But do you know
the new Rules? How is ‘misconduct’ defined in those rules?
A — No. I am totally in the dark.
S — My dear Arjun, there is no
change in the definition of ‘misconduct’. It is the same thing as before. Same
two schedules. No changes at all. Only the jurisdiction has changed.
A — So all these small items of
misconduct will be seen by NFRA?
S — Yes. But not in all cases.
A — What do you mean?.
S — Relax Arjun. NFRA will deal
with only large firms. For small and medium firms like yours, the jurisdiction
is still with your Institute.
A — What do you mean by large
firms?
S — Large means those firms who
are auditing more than 200 companies; or more that 20 listed companies, or
those who are auditing the companies listed abroad.
A — Oh! I won’t have such big audits in this birth.
Next birth, I will surely not be a CA! Please help me in my next birth; and
keep me away from this profession.
.S — Don’t be so negative and
skeptical. You need to do the profession properly.
A — Anyway! Good news is that an
average CA will not have to face NFRA. Right? What relief to all small and
medium firms like ours! Lord, you are very kind!
S — But do read and understand
what is NFRA about.
A — Leave it. Bhagwan,
for the time being, explain it to me next time we meet. Now I have to complete
VAT audits and understand the Union Budget.
S — I know all of you CAs! You
will study it only when it pinches you. You will be sleeping until a thing
starts biting you! That always keeps you
under some fear or the other. Learn to update your knowledge constantly. Not by
merely managing your CPE hours.
A — I agree. Our BCAS motto is ‘Na
bhayam Chaasti Jaagratah’. He who is awake and alert has nothing to be
afraid of! Next time, please tell me about NFRA in more detail.
S — Sure, dear.
A — Bhagwan, Pranaam to
you!
!!OM Shanti!!
Note: The above dialogue discusses about the proposed NFRA
provisions (section 132 of the Companies Act, 2013) and gives a glimpse on its
applicability. _
