The Chairperson of the National Financial Reporting Authority (NFRA), Dr. Ajay Bhushan Prasad Pandey, stated here today that good governance is rewarded by investors, while he was speaking at the “Financial Reporting and Corporate Governance in the Corporate Sector” conference.
Furthermore, the NFRA Chairperson stated that Sound Corporate Governance is the bedrock of the corporate sector, which contributes to the Nation’s overall sustainable growth and development.
Dr. Pandey spoke about a number of groundbreaking reforms initiated by Indian policymakers in recent years. These reforms have been implemented to facilitate the growth and development of both the business sector and society. Aadhaar, UPI, GST, and tax reforms are some examples of these reforms. In addition, he discussed a variety of institutional building reforms such as NFRA, IBC, NCLT, and others.
Dr. Pandey stated that the Finance Community and Directors must take action to prevent fraud and the failure of internal financial controls. These preventative measures could include the creation of a Case Study of Fraud Register. Given that not all corporate frauds were perpetrated by highly complex schemes, but rather by time-honored methods such as fictitious sales and loans and advances, over invoicing of purchases, related party transactions, and failure of fundamental internal controls, it is possible that it is time to return to the fundamentals of basic internal controls.
Dr. Pandey proposed crowdsourcing risk-related and priority issues for auditor consideration in order to foster trust and meet stakeholders’ expectations. He also suggested that the Audit Committee consider the UK Brydon report’s recommendation to publish the Directors Risk Report prior to the Audit Committee deciding the scope of the audit so that it can assess stakeholder input on the Risk Report.
He argued that aligning sustainability reporting standards with those of the IFRS Foundation’s International Sustainability Standards Board is preferable.
NFRA Press Release dt. 02/12/2022: Investors reward well-governed corporates (NFRA Chairperson)