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CMA Intermediate · Corporate Accounting and Auditing · National Financial Reporting Authority (NFRA)

Once the National Financial Reporting Authority has initiated an investigation into alleged misconduct of a chartered accountant under Section 132, what is the position regarding proceedings by any other institute or body on the same matter?

Once NFRA has initiated an investigation, no other institute or body may initiate or continue any proceedings on the same matters of misconduct, as provided in the proviso to Section 132(4)(a). NFRA's jurisdiction therefore displaces parallel proceedings by the professional institute.

  1. AThe institute may continue its proceedings in parallel with the NFRA
  2. BNo other institute or body shall initiate or continue proceedings on such misconductCorrect
  3. CThe institute may continue but cannot pass a final order
  4. DOther bodies may proceed only if the Central Government permits

Explanation

The proviso to Section 132(4)(a) states that no other institute or body shall initiate or continue any proceedings in such matters of misconduct where NFRA has initiated an investigation. Hence parallel proceedings are barred; the option allowing the institute to proceed in parallel is wrong.

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