The National Financial Reporting Authority ( NFRA ) chairperson, Ajay Bhushan Prasad Pandey, stated that the quality of audits has improved over the last 3 to 4 years and also he explained the importance of better communication between auditors and board members to prevent corporate failures. Since its establishment in October 2018, the NFRA has issued over 80 orders against auditors for lapses. These actions showed the necessity of vigilance and responsibility among auditors and board members. Master GST – Expert-Led Courses for Ambitious Professionals Pandey expressed that many auditors are doing good work, but some have not been as alert and sensitive as needed which led to corporate failures. He pinpointed the need for awareness of these pitfalls and responsibilities. The NFRA is launching courses to increase and improve auditors’ knowledge to address this issue and regulations by the Securities and Exchange Board of India and the Companies Act, 2013 place responsibilities on auditors and board members to ensure quality oversight.

Pandey expressed his concern that audit committees often failed to engage with auditors and ask the right questions leading to missed red flags. He pointed out the importance of two-way communication between auditors and those charged with governance ( TCWG ), including audit committee members. In collaboration with the Indian Institute of Corporate Affairs ( IICA ), the NFRA is planning to launch courses to upgrade the knowledge of auditors who will be auditing large listed companies. A four-month course for audit committee members has already started to help them understand their responsibilities and know what questions to ask auditors. Master GST – Expert-Led Courses for Ambitious Professionals Pandey cited cases like DHFL, Cafe Coffee Day, Reliance Capital, and Reliance Home Finance as examples of corporate failures where auditors repeatedly failed to raise red flags. He expressed that if auditors had raised concerns earlier, major losses suffered by banks and shareholders could have been avoided.