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Section 132 of the Companies Act, 2013 and the authority that oversees India's auditors

Background

The National Financial Reporting Authority, shortened to NFRA, is the body that watches over accounting and auditing in India's larger companies. Section 132 of the Companies Act, 2013 is its source, and the Government of India constituted it under the first sub-section there. Its duties are set out in the next sub-section of the same section. It recommends the accounting and the auditing policies and standards that companies should follow, and the Central Government approves them. Compliance with those standards is then monitored and enforced by the Authority. It also keeps an eye on how well the professions tied to that compliance are serving, and suggests how the quality of service can be improved. The NFRA Rules, 2018 require it to work in the interest of the public and of investors, creditors and others connected with the companies and bodies corporate it covers, and the same Rules set out which classes of company fall within its reach.

Constituted under: Section 132(1), Companies Act, 2013 Duties provision: Section 132(2) Rules: NFRA Rules, 2018 Approves the standards: Central Government

Why it matters for exams: NFRA is a frequent Economy and Company Law question: the section of the Companies Act, 2013 that constitutes it, who approves the standards it recommends, and the Rules that fix its reach.

Kerala PSCUPSCBank

12 November 2026 Source: National Financial Reporting Authority

In plain words

NFRA National Financial Reporting Authority — The oversight body for accounting and auditing standards in India's larger companies.

Body corporate — A company or other entity that the law treats as a legal person in its own right.