CIC: Public Audit Orders Boost Financial Trust

New Delhi, Mar 9 (PTI) The Central Information Commission (CIC) has advised the National Financial Reporting Authority (NFRA) to place orders, directions, circulars and policy decisions affecting audit practices and standards in the public domain.

The observation came while disposing of a second appeal under the RTI Act seeking documents related to NFRA permitting auditors or audit firms to be represented by legal counsel during oral hearings.

The NFRA, set up by the government in 2018 under the Companies Act, 2013, regulates auditors and monitors compliance with accounting and auditing standards by companies. It also oversees the quality of audit services to ensure reliability in financial reporting.

"NFRA safeguards the credibility of financial statements, which are relied upon by investors, lenders, regulators, and the public at large," Information Commissioner P R Ramesh said in the order.

Highlighting the need for transparency in audit-related decisions, the Commission said, "Any orders, directions, circulars, and policy decisions affecting audit practices and standards should be placed in public domain for protecting public interest by strengthening trust in financial reporting."


The Commission also reminded the authority of its obligations under the RTI Act.

"There is no denying that the respondent is duty bound by virtue of the provisions of Section 4 of the RTI Act to publish the information indicated in Section 4(1)(b) and 4(1)(c) on its website so that the public have minimum resort to the use of the RTI Act to obtain the information," the order said.

Accordingly, the CIC advised the authority to "place the maximum information related to various circulars/policy decisions/orders issued by their department on their official website as per the provisions of Section 4 of the RTI" in the larger public interest.

During the hearing, NFRA submitted that the document sought by the appellant was not an order but an internal note issued in individual cases along with show-cause notices to auditors or audit firms facing proceedings.

Accepting the submission, the Commission held that an appropriate response had been provided by the CPIO.