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Audit committees are a critical building block of sound corporate governance: Dr. Ajay Bhushan Prasad Pandey, IAS Chairperson NFRA

Audit committees are a critical building block of sound corporate governance: Dr. Ajay Bhushan Prasad Pandey, IAS Chairperson NFRA

“There has been phenomenal growth in public participation, both retail and institutional, in the private sector making India a nation of investors instead of nation of savers. In 2020 there are around 3 crore Demat accounts which has since grown to about 14 crores today. Similarly total AUM in Mutual funds have also grown from about 30 lakhs in 2020 to about 59 lakhs today. Trust in the financial reporting system and corporate governance corporate is a critical component in investment and audit committees are at the Centre of this High-Quality Financial Reporting Framework, a critical building block of sound corporate governance.” said Dr. Ajay Bhushan Prasad Pandey, IAS Hon’ble Chairperson, National Financial Reporting Authority (NFRA) at an International Roundtable Conference organised by ASSOCHAM.

“We are at the cusp of a growth cycle and India is rising in the world. We are growing at 7-8% in real terms while the world struggles with 2-3% growth. CRISIL, an S&P Company, predicts that by 2031 India will be a $7 trillion economy with rise in per capita income. The last decade has seen many path breaking reforms with ‘Digital Reforms’ as the epicentre for laying down sound economic fundamentals for growth and development. From a monthly collection of 80,000 crores in 2017 to 2 lakh crores last month, GST collection has seen a massive growth due to these digital reforms. UPI records monthly transactions of 1200 crores which is phenomenal considering that the adult population in the country is about 90 crores.” He added.

Shri Ram Mohan Johri, Guest of Honour at the event in his address said, “By 2047, predictions are that India’s economy will cross $30 trillion. Corporate sector will have to play a major role in achieving it, making it important that the sector runs efficiently and effectively. As stakeholders, we must rise to the occasion to elevate corporate governance to the required levels. Areas of work of audit committees need to be enhanced to be effective in IT environment. Areas such as access control, change management, cyber security and backup and recovery mechanisms need to be added in addition to their existing responsibilities. In matters of regulation we are at an advantageous stage where we can learn from the experiences of others.”

Ms. Lucia Real Martin Executive Director, ACCA Global gave her special address talking on the theme of today’s conference is at the heart of contemporary corporate governance. In today’s complex environment, the role of audit committees has never been more critical. Audit committees serve as the guardians of transparency, accountability and integrity within organisations. They provide independent oversight, evaluate internal controls and mitigate risks, safeguarding the interests of shareholders and stakeholders alike. At ACCA we are deeply committed to advancing the principles of good governance and fostering excellence in the accounting and finance profession

CA (Dr.) Ashok Haldia Chairperson, ASSOCHAM Task Force for Accounting Standards, Sustainability Accounting and Integrated Financial Reporting said, “Quality review and inspections carried out by regulators should also reflect on the responsibility and work done by the audit committee along with those of the auditors. The disciplinary orders and quality review boards have sensitised and enhanced the quality of audit and by reflecting on the role of audit committee it will sensitise the audit committee and its members which will enhance the functioning of the committee. Laws governing the practice is elaborate and need no modification, the gap between what is the law and how it is practiced is what needs to be bridged.”

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