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CS Professional · Environmental, Social and Governance (ESG) - Principles and Practice · Legislative Framework of Corporate Governance in India

Suppose NFRA has not yet been constituted under section 132. Kaveri Foods Ltd asks which body the Central Government consults before prescribing ICAI-recommended accounting standards in that interim period, according to the proviso to section 133.

Under the proviso to section 133, until NFRA is constituted, the Central Government consults the National Advisory Committee on Accounting Standards, constituted under section 210A of the Companies Act, 1956, and examines its recommendations before prescribing standards recommended by ICAI.

  1. AThe National Financial Reporting Authority constituted under section 132 anyway
  2. BThe Securities and Exchange Board of India
  3. CThe National Advisory Committee on Accounting Standards constituted under section 210A of the Companies Act, 1956Correct
  4. DThe Registrar of Companies of the state where the company is registered

Explanation

The proviso says that until NFRA is constituted under section 132, the Government may prescribe standards as recommended by ICAI, in consultation with and after examining recommendations of the National Advisory Committee on Accounting Standards constituted under section 210A of the 1956 Act. Naming NFRA is wrong because it does not yet exist in this scenario.

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