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CMA Foundation · Fundamentals of Financial and Cost Accounting · Four Frameworks of Accounting and Forms of Organization

Which of the following best describes the role of the National Financial Reporting Authority (NFRA) in India's accounting framework?

NFRA recommends accounting and auditing standards and policies for companies and oversees compliance with them, including quality of audit. It does not collect income tax, register partnerships or issue currency, which are tasks of the tax authorities, the Registrar of Firms and the RBI.

  1. AIt recommends accounting and auditing policies and oversees compliance with themCorrect
  2. BIt collects income tax from companies
  3. CIt registers new partnerships
  4. DIt issues currency notes

Explanation

NFRA is constituted under the Companies Act, 2013 to recommend accounting and auditing standards and to monitor and enforce compliance with them. Collecting tax, registering partnerships and issuing currency are functions of other bodies, so those options are wrong.

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