Don't rush into setting up NFRA: ICAI

NEW DELHI: Citing national interest, the Institute of Chartered Accountants of India ( ICAI) has sought further deliberations with various stakeholders before setting up the National Financial Reporting Authority.

Under the new Companies Act, the government would be setting up the NFRA, a quasi judicial body that would monitor and ensure compliance with various accounting and auditing standards, among others.

"Setting up NFRA needs more deliberations. We are engaging in a dialogue with the government as there are some issues," ICAI president Manoj Fadnis told reporters here.

"In larger interest of the country, NFRA should not be rushed into," he added.

Concerns have been raised in some quarters that establishing NFRA could result in dilution of powers of ICAI.

Fadnis also said that the ICAI would shortly sign a Memorandum of Understanding ( MoU) with the Indian Railways to help them switch over their accounting standard to 'accrual accounting' system.

Accrual accounting method measures the performance and position of a company by recognising economic events regardless of when cash transactions occur, while cash flow statements refer to flow of cash in and out of the business.

ICAI would take up pilot projects for the purpose.