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Inviting Suggestions on the Consultation Paper on Statutory Audit and Auditing Standards for Micro, Small and Medium Companies (MSMCs)

Inviting Suggestions on the Consultation Paper on Statutory Audit and Auditing Standards for Micro, Small and Medium Companies (MSMCs)
Start Date :
Nov 12, 2021
Last Date :
Nov 30, 2021
23:45 PM IST (GMT +5.30 Hrs)
Submission Closed

National Financial Reporting Authority (NFRA) was established by the Central Government in October 2018 under Section 132(1) of the Companies Act, 2013. An important function of ...

National Financial Reporting Authority (NFRA) was established by the Central Government in October 2018 under Section 132(1) of the Companies Act, 2013. An important function of NFRA under Section 132(2)(a) of the Companies Act, 2013 is to make recommendation to Central Government on the formulation and laying down of accounting and auditing policies and standards for adoption by companies or class of companies or their auditors.

In view of the significant role played by companies in India in the economic growth and development of the Nation, it is essential that the regulatory environment is conducive to support, and not burden, the growth in business and economic activities of these entities. A preliminary analysis has been done by NFRA on the key financial parameters of the companies registered in India from their MCA-21 filings and it is found that the fees paid to auditors by a large majority of Micro, Small and Medium Companies (MSMCs) are way below what an audit, when performed in compliance with the letter and spirit of the Standards of Auditing, would require.

Major economies of the world require statutory audit for small companies only in case some minimum criteria of public interest are satisfied. Even in India, income tax audit is now not compulsory where the turnover is Rs. 10 crore or less provided not more than 5% of the transactions are in cash. GST audit has also been completely done away with.

NFRA has prepared a Consultation Paper explaining the issues involved and providing the data and information required for responding to the questions raised in an informed manner, with the objective to seek the comments/suggestions of the wider stakeholder group and the public at large on questions raised.

Click here to read the Consultation paper issued by NFRA.

Please submit your comments below latest by 30th November, 2021.

The comments may also be sent by email at: comments-tac.paper@nfra.gov.in.

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ABHAY KUMAR 1 year 3 months ago

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Narender Kumar 1 year 3 months ago

हर प्रकार की सेवा या सामान बेचने वाले को GST बिल रखना अनिवार्य बनाना चाहिए कियोंकि जब भी कोई कर्मचारी सर्कार या कम्पनी के लिए अपनी जेब से खर्च कर देता है तो उसे GST बिल लाने के लिए कहा जाता है और GST बील हर दुकानदार या सेवादाता नहीं रखता है जिससे की वो कम्पनी के लिए या सर्कार के लिए करने वाले कार्य धीरे पड़ जाते है ...और कर्मचारी भी पीछे हटने लगता है..

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Narender Kumar 1 year 3 months ago

हर प्रकार की सेवा या सामान बेचने वाले को GST बिल रखना अनिवार्य बनाना चाहिए कियोंकि जब भी कोई कर्मचारी सर्कार या कम्पनी के लिए अपनी जेब से खर्च कर देता है तो उसे GST बिल लाने के लिए कहा जाता है और GST बील हर दुकानदार या सेवादाता नहीं रखता है जिससे की वो कम्पनी के लिए या सर्कार के लिए करने वाले कार्य धीरे पड़ जाते है ...और कर्मचारी भी पीछे हटने लगता है..

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Narender Kumar 1 year 3 months ago

हर प्रकार की सेवा या सामान बेचने वाले को GST बिल रखना अनिवार्य बनाना चाहिए कियोंकि जब भी कोई कर्मचारी सर्कार या कम्पनी के लिए अपनी जेब से खर्च कर देता है तो उसे GST बिल लाने के लिए कहा जाता है और GST बील हर दुकानदार या सेवादाता नहीं रखता है जिससे की वो कम्पनी के लिए या सर्कार के लिए करने वाले कार्य धीरे पड़ जाते है ...और कर्मचारी भी पीछे हटने लगता है...

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SUTHAHAR P 1 year 3 months ago

Audit is a vigilance mechanism which develops a fear psychosis in the mind of promoters for not doing anything wrong in the eye of laws. In case the Audited requirement for MSMCs gets exempted there is a lot more probability for false and bogus financials being portray before the Government of India by the promoters of such Companies.

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SUTHAHAR P 1 year 3 months ago

when it comes to the quality of audit for micro and small businesses, we believe that there should be a minimum audit price criterion set based on the turnover/paid-up capital of the firms, so that the quality of the audit can be maintained for all types of businesses. This would not only improve the quality of the audit, but will also help the professionals who provide such services to raise their living standards.

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SUTHAHAR P 1 year 3 months ago

An auditor is a third-party entity that provides an unbiased, truthful, and fair assessment of a company’s operations and financials. Without the oversight of an auditor, there is a high risk of imbalance in the Indian economy. This may give the promoters the flexibility to handle the finances on their own without fear of being found in violation of any law, resulting in the misuse of funds.

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