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

Under section 132 of the Companies Act, 2013, NFRA may investigate matters of professional or other misconduct by members or firms of chartered accountants. In which manner can NFRA begin such an investigation?

NFRA may start an investigation into professional or other misconduct of chartered accountants either on its own motion (suo motu) or on a reference made to it by the Central Government, as section 132(4)(a) provides. Shareholder complaints, ICAI references or NCLT orders are not the stated triggers.

  1. AOnly on a complaint filed by a shareholder of the audited company
  2. BOnly on a reference made by the Institute of Chartered Accountants of India
  3. CSuo motu or on a reference made to it by the Central GovernmentCorrect
  4. DOnly on an order of the National Company Law Tribunal

Explanation

Section 132(4)(a) empowers NFRA to investigate either suo motu or on a reference made by the Central Government. The other options name triggers that the section does not provide.

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