**Executive Summary**
This document details the National Financial Reporting Authority's (NFRA) initiatives aimed at enhancing audit quality in India. These initiatives include outreach programs, the launch of an "Audit Firms Survey 2025", and the release of "Audit Practice Toolkits" on 04 November 2025, to support small and medium-sized audit practitioners. The document also mentions webinars and a 4-month training course with IICA to build capacity for independent directors.
**Key Points / Main Content**
* **Outreach Programs:**
* NFRA is conducting outreach programs across India to enhance audit quality and promote sustainable audit practices, especially for small and medium-sized firms.
* Outreach programs were held in Hyderabad (26.09.2025, attended by 65 practitioners from 27 audit firms) and Indore (06.10.2025, attended by 42 practitioners from 13 audit firms).
* **Audit Firms Survey 2025:**
* NFRA initiated its first "Audit Firms Survey 2025" to address audit quality issues and support audit practitioners.
* 383 firms across India participated in the survey.
* **Standard Setting Functions:**
* NFRA recommended a set of 40 revised high-quality Standards on Auditing, including standards on group audits and quality management.
* NFRA recommended 47 amendments/changes to Ind AS, of which 44 have been notified.
* A set of 27 Accounting Standards for small and medium companies have been recommended and notified by the Ministry of Corporate Affairs.
* **Enforcement Functions:**
* NFRA has taken disciplinary action for professional misconduct to sensitize the audit profession.
* **Audit Quality Inspections:**
* NFRA initiated audit quality inspections of audit firms in December 2022, covering both firm-wide inspections and inspections of individual audit engagements for Public Interest Entities.
* 12 audit quality inspection reports have been published on the NFRA website.
* **NFRA Circulars:**
* NFRA has issued circulars reiterating legal and standard provisions to prevent non-compliances and improve financial reporting quality.
* **Auditor-Audit Committee Interactions:**
* NFRA has commenced a series of Auditor-Audit Committee Interactions.
* **Collaboration with IICA:**
* NFRA has collaborated with IICA and launched a 4-month course for capacity building of independent directors and audit committee members.
* **Audit Practice Toolkits:**
* NFRA issued 'Audit Practice Toolkits' on its website on 04 November 2025 to support small and medium practitioners.
* **Webinar Series:**
* NFRA announced the launch of a webinar series as part of its 2025-26 initiative "Creating a Better Financial Reporting Ecosystem."
**Impact Analysis**
**Audit Firms:**
* *Impact*: Subject to increased scrutiny through surveys, quality inspections, and disciplinary actions to ensure compliance with auditing and accounting standards. Will be supported by the Audit Practice Toolkits.
* *Action Required*: Participate in NFRA surveys and inspections, implement revised standards, and ensure compliance with NFRA circulars.
**Auditors (Small and Medium Practitioners):**
* *Impact*: Access to NFRA's Audit Practice Toolkits and increased awareness of professional responsibilities.
* *Action Required*: Utilize the Audit Practice Toolkits to improve audit practices and stay updated on regulatory changes.
**Independent Directors and Audit Committee Members:**
* *Impact*: Improved capacity and awareness of their responsibilities in ensuring audit quality.
* *Action Required*: Participate in the NFRA-IICA training course to enhance knowledge and skills.
**Ministry of Corporate Affairs:**
* *Impact*: Notification and implementation of accounting standards for small and medium companies recommended by NFRA.
* *Action Required*: Continue collaboration with NFRA and implement recommended accounting standards.
Key Entities Referenced
National Financial Reporting Authority (NFRA): The primary regulatory body initiating and executing the described outreach programs, audit firms survey, and standard-setting functions to enhance audit quality.
Audit Firms Survey 2025: A key initiative by NFRA to address issues related to audit quality and support audit practitioners.
Ministry of Corporate Affairs: The ministry under which NFRA operates, as indicated by the Minister of State's involvement.
Ind AS (Indian Accounting Standards): The Indian Accounting Standards, amendments to which are recommended by NFRA.
Audit Practice Toolkits: A resource launched by NFRA to support small and medium practitioners engaged in audits.
National Financial Reporting Authority
NFRA has taken up Nationwide Outreach
Programmes and Audit Firms Survey 2025 to
enhance Audit Quality
‘Audit Practice Toolkits’ launched to support the small and
medium practitioners engaged in the audits
प्रव तथ: 02 DEC 2025 5:49PM by PIB Delhi
The initiative of National Financial Reporting Authority (NFRA) through outreach programmes across the
country is aimed at enhancing audit quality and promoting sustainable audit practices for all sizes of audit
firms and especially the small & medium sized audit firms. The series of outreach programme is titled
“Creating a Better Financial Reporting World” and are being organized at various locations across the
country.
Outreach programmes and workshops were held as detailed below:
i. At Hyderabad on 26.09.2025. It was attended by 65 practitioners, including representatives from 27
audit firms.
ii. At Indore on 06.10.2025. It was attended by 42 practitioners, including representatives from 13
audit firms.
NFRA initiated its first-ever “Audit Firms Survey 2025” alongside the outreach activities aimed at
addressing issues related to audit quality, and towards its role of supporting all audit practitioners
effectively. The insights gathered will enable NFRA to further tailor its roles and responsibilities and
enable constructive dialogue with all audit firms and audit practitioners. A total of 383 firms across India
participated in the survey
NFRA has taken the following main steps in keeping with its mandate:
i. Standard Setting Functions:
Auditing Standards: A set of 40 revised high-quality Standards on Auditing including revised
Standard on Group Audits and Standards on Quality Management, have been recommended by
NFRA
Accounting Standards: A total of 47 amendments/changes to Ind AS (Indian Accounting
Standards) have been recommended of which 44 have been notified. A set of 27 Accounting
Standards for small and medium companies have been recommended which have been notified by
the Ministry of Corporate Affairs.
ii. Enforcement Functions:
NFRA has taken disciplinary action for professional misconduct thereby sensitising the audit
profession regarding their responsibility in law and accounting and auditing standards.Learnings from NFRA orders has been published by the profession itself. NFRA has also
conducted webinars and is consistently engaging with stakeholders to disseminate its experience
and findings.
iii. Audit Quality Inspections:
In December 2022, NFRA initiated audit quality inspections of audit firms covering both firm-
wide inspection and inspection of individual audit engagement undertaken by the audit firms in
respect of the audit of Public Interest Entities. So far 12 audit quality inspection reports have been
published on NFRA website.
iv. NFRA Circulars:
NFRA has issued circulars, reiterating provisions in law and standards, with a view to prevent
recurrence of such non-compliances and bring in systemic improvement in the quality of financial
reporting in India, towards advising and guiding various stakeholders.
v. NFRA series on Auditor-Audit Committee Interactions:
A series of Auditor-Audit Committee Interactions has been commenced as it has critical role in
ensuring better audit quality.
vi. NFRA has collaborated with Indian Institute of Corporate Affairs (IICA) and a 4-month course had
been launched for capacity building of independent directors and audit committee members of
companies who have significant responsibilities towards audit quality in law.
(vii) NFRA has issued ‘Audit Practice Toolkits’ on its website on 04 November 2025 with a focus on
supporting the small and medium practitioners engaged in the audits.
(viii) Announced launch of webinar series as part of its 2025-26 initiative “Creating a Better Financial
Reporting Ecosystem”.
This information was given by the Minister of State in the Ministry of Corporate Affairs; and Minister of
State in the Ministry of Road, Transport and Highways, Shri Harsh Malhotra in a written reply to a
question in Rajya Sabha today.
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NB/PK
(रलीज़ आईडी: 2197722) आगंतुक पटल : 973
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