Cabinet Decisons Current Affairs
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The Union Cabinet approved establishment of National Financial Reporting Authority (NFRA) as an independent regulator for the auditing profession. It aims to tighten regulatory oversight over auditors and plug loopholes. It will be independent from those it regulates for enforcement of auditing standards and ensuring quality of audits.
National Financial Reporting Authority (NFRA)
NFRA will independent regulator under Companies Act, 2013. Its mandate is for establishment and enforcement of accounting and auditing standards and oversight of work of auditors. It will ensure quality of audits to strengthen independence of audit firms and therefore, enhance investor and public confidence in financial disclosures of companies.
Composition: NFRA will be 15 members body, consisting of Chairperson, three full-time Members and one Secretary.
Functions: It will overarching watchdog for auditing profession. It can debar an erring auditor or auditing firm for up to 10 years besides it can also slap heavy penalties. Even powers of Institute of Chartered Accountants of India (ICAI) to act against erring chartered accountants will be vested with NFRA.
Jurisdiction: It extends investigation of Chartered Accountants and their firms to all listed companies as well as large unlisted public companies. Government will prescribe thresholds in the rules. Government can also refer other entities for investigation where public interest is involved. However, inherent regulatory role of existing ICAI will continue in respect of its members and specifically to audits pertaining to private limited companies and public unlisted companies below threshold limit notified in rules. Further, ICAI will continue to play its advisory role with respect to accounting and auditing standards and policies by making its recommendations to NFRA.
Impact: Establishment of NFRA will improve foreign/domestic investments, enhance of economic growth, support globalisation of business by meeting international practices and assist in further development of audit profession.
NFRA and Quality Review Board (QRB): QRB will continue its quality audit in respect of private limited companies, public unlisted companies below prescribed threshold and also with respect to audit of companies delegated by NFRA.
The need for establishing NFRA was in wake of accounting scams and to establish independent regulator independent from those it regulates for enforcement of auditing standards. Its establishment is in line with key changes brought in by the Companies Act, 2013 which was on specific recommendations of Standing Committee on Finance (in its 21st report).
The Union Cabinet has approved Memorandum of Understanding (MoU) between India and Japan for collaborative research in the field of silkworm and silk industries. The MoU was signed between Central Silk Board (CSB), India and National Institute of Agrobiological Sciences (NIAS), Japan in November 2016.
The MoU was of scientific and technological nature. Its aim was to initiate Collaborative Research for developing prolific bivoltine hybrids of silkworm suitable for Indian tropical conditions. Its purpose was to help in developing prolific hybrid silkworms, which will improve quality standards and manufacturing capacity of Indian sericulture industry to enhance exports of silk and silk products. It is expected that subsequent to MoU, Indian Textiles and Apparel Industry will be able to produce world class silk and silk products. The improvement of quality and productivity will ultimately increase export of silk products.
India’s Silk Industry
India’s Silk Industry is world’s second largest after China. The total production of silk in India stood at around 23,000 tonnes in the year 2011-12. India produces four varieties of silk produced, viz. Mulberry, Eri, Tasar and Muga. About 80% of silk produced in country is of mulberry silk, majority of which is produced in the three southern States of Karnataka, Andhra Pradesh and Tamil Nadu. Sericulture Provides gainful occupation to around 63 Lakh persons in rural and semi-urban areas in India. About 97% of raw silk in India is produced in five Indian states of Karnataka, Andhra Pradesh, Tamil Nadu, West Bengal and Jammu and Kashmir.