Archive · 17 Dec 2025
NFRA flags audit firms for violating norms
The National Financial Reporting Authority (NFRA) has found that some audit firms in India are not following the rules properly.
They are not keeping their audit files correctly and are asking for too much extra time to submit them.
The NFRA says that these audit files are very important because they help support the audit reports.
The rules say that audit firms must keep these files for a certain amount of time, especially if there are any legal or regulatory issues.
The NFRA wants audit firms to make sure they have good policies and controls to keep these files safe and complete.
They also want the firms to submit the files within 7 days when asked.
NFRA has flagged concerns with audit firms for not maintaining and archiving audit files properly.
Audit firms are seeking unreasonable extensions for submitting audit files, affecting timely consideration by NFRA.
Extensions are often used to convert files between physical and electronic formats or to prepare additional documentation.
Audit firms must keep audit files for every audit engagement as per the Standard on Quality Control (SQC 1).
NFRA suggests audit firms establish adequate policies and controls over audit files and submit them within 7 days of receipt of communication.
- Who
- National Financial Reporting Authority (NFRA) and audit firms
- What
- Violation of auditing norms and deficiencies in audit files
- When
- Not specified
- Where
- India
- Why
- To ensure compliance with auditing standards and timely submission of audit files
- Regulator
- National Financial Reporting Authority (NFRA)
- Issue
- Violation of auditing norms
- Deficiencies
- Incomplete audit files, unreasonable extensions, documentation gaps
- Standard
- Standard on Quality Control (SQC 1)
- Timeline
- 7 days for submission of audit files to NFRA
- Retention Period
- Beyond 7 years if under regulatory scrutiny or legal proceedings