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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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Showing 363 Submission(s)
KRISHAN GOPAL MAHESHWARI
Krishan Gopal Maheshwari 3 years 7 months ago

We need to build MSME from a middle income company to High income company. Suggest disqualification of MSME if it does not satisfy “MSME definition/qualifying “ conditions for three immediately preceding financial years. If company is exempt from audit, it should file unaudited annual financial statements as basis for corporate tax return. Subsidiaries of foreign or large group limited companies that meet MSME definition shouldn’t be eligible for audit exemption. Have internal audit mandatory.

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KRISHAN GOPAL MAHESHWARI
Krishan Gopal Maheshwari 3 years 7 months ago

Audit costs correlate with Audit Quality. Company Size & Company risk have a significant relationship to audit fees than to profitability or complexity. Companies wishing to benefit from incentives should submit annual audited accounts by CA/MBA. Account records should be available & accessible for 10 years. Financial disclosures shouldn’t be required if shareholders are less than 20. MSME can raise upto 100M or get loan if they provide audited financial statements. Minimum bookkeeping.

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rajivjain45@gmail.com
Rajiv Jain 3 years 7 months ago

Dear sir.
Audit for large companies are done by CA .
Medium And small may self audit in time bound period so that one' should know about the position of the company
Were they can control the financial matters
If any irregularities arises.

Thanks

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vijayshankarsharan
VijayShankar Sharan 3 years 7 months ago

You Should never talk Undesirably about Your Current Position, Industrial revolution, important Systems, Micro, Small, Medium Enterprises its Developed Promise to understand with Production to Marketing & all. People You have Worked with. Anything Negative You Say about any topic Will Reflect Negatively on You.

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KRISHAN GOPAL MAHESHWARI
Krishan Gopal Maheshwari 3 years 7 months ago

Audit plays important role in analysis/advise/assurance. 1) Suggest to remove dormant companies, subsidiaries, groups/holding companies to retain only active independent companies, where financial reporting decisions wouldn’t be influenced by group policies. 2) Suggest to have a voluntary audit from MBA degree holder of the company is larger in total assets, & director consider audit helps in credit rating score with good accounting records. 3) Please give opportunity for MBA FOR audit for MSME

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muralikumar_8
Murali Kumar 3 years 7 months ago

Modij, Without proper Business Audit by Government, effort towards success of Demonitisation, digital transaction fails.Lack of proper audit by Government give birth to fraud production,transaction,sale of unaccounted products by fraud manufacturers&sale by fraud business practices by fraud businessmen help to escape Income Tax declaration where nation is first looser of fees fines sale tax&Income Tax.Considering increase in above fraud I request new Central Government Audit Offices in Districts

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