Generally the audit firms are subject to peer review by the Institute of Chartered Accountants of India (ICAI), review of audited financial statements by the Financial Reporting Review Board (established by ICAI) and review of audit firms under the aegis of Quality Review Board (established by government of India under Chartered Accountants Act, 1949).
The Companies Act, 2013 provides for the constitution of the National Financial Reporting Authority (NFRA) that will oversee the quality of service of professionals associated with compliance of accounting and auditing standards. The NFRA under the Companies Bill, 2012 will have wide powers, inter alia, the power to investigate, powers of a civil court related to discovery and seizure of books and examination of witnesses. It will also have the power to investigate auditors that are registered under section 22 of the Chartered Accountants Act, 1949. Section 132 (2) of the 2013 Act gives the authority overriding and all encompassing powers relating to scrutiny and compliance of accounting and audit standards over any other law including Chartered Accountants Act, 1949.
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