ICAI in talks with NFRA to streamline overlapping audit investigations

ICAI is coordinating with NFRA to identify overlapping cases and avoid duplication of investigations, aiming to improve regulatory efficiency and oversight

The Institute of Chartered Accountants of India (ICAI) is working with the National Financial Reporting Authority (NFRA) to identify overlapping cases between the two bodies and ensure there are no redundancies, according to sources.

 

The idea behind the exercise is to promote better coordination between the two bodies. Sources said ICAI is expected to stop its investigations in matters where NFRA had also started a probe.

 

Some of the cases that the ICAI is looking into include Gensol, Bluesmart, and IndusInd. These cases are also being probed by the NFRA.

 

The ICAI and NFRA have often been at loggerheads in the past, with the former calling for a pause in the revision process of audit standards to allow for a comprehensive review. This was after NFRA had brought out revised Standards on Auditing 600 (SA) for public consultations to address what it had found to be “the severely deficient quality and serious lack of due diligence” in Group Audits in India.

 

The ICAI, however, felt that given the complexities of the Indian market, the revised standards will concentrate audit work in the hands of a few big firms. Sources in the ICAI said that the unique regulatory architecture and professional environment in India require a careful consideration of domestic needs before transplanting overseas standards.

 

ICAI’s Financial Reporting Review Board (FRRB) had in April 2025 decided to review the financial statements and the statutory auditor’s report of Gensol Engineering Ltd and BluSmart Mobility Pvt Ltd for the financial year 2023-24 (FY24) on a suo motu basis.

 

The Securities and Exchange Board of India (Sebi) had referred the same matter to the NFRA for further inspection.

 

In case of IndusInd, the NFRA had launched a probe after receiving a complaint against accounting lapses in the bank through the Centralised Public Grievance Redress and Monitoring System (CPGRAMS). The case has also been on ICAI’s radar, but no final recommendation has been made yet.

 

In February, ICAI President Prasanna Kumar D had said that they had formed a special team to review the top 10-15 public interest cases, including Gensol Engineering and IndusInd Bank.