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Daily The Economic Times Editorial With Vocabulary in Detail : NFRA For oversight clarity over accounting firms

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Market regulator Sebi’s demand to oversee(देखरेख/पर्यवेक्षण करना) auditors and accountants, soon after the Cabinet approved setting up of the National Financial Regulation Authority (NFRA), points to the perils(जोखिम/ आशंका)of regulatory proliferation(प्रसार/तीव्र वृद्धि) and associated potential for turf battles(लड़ाई/संग्राम). We need unified regulation of each sector and accountability of the regulator to a committee(समिति/सभा) of Parliament.Sebi’s demand is logical, and needed to improve corporate governance. Investor(निवेशक) protection calls for accounting data that can be taken for granted(स्वीकृत). The Uday Kotak Committee’s report on corporate governance recommended clear powers for Sebi to act against auditors and other third-party fiduciaries(ज़िम्मेदार व्यक्ति) with statutory(व्यवस्था से स्थापित/वैधानिक) duties under the securities law.

There is no conflict between accountants’ first-line regulation being performed by a self-regulatory organisation (SRO) such as the Institute of Chartered Accountants of India and NFRA having oversight over such SROs. The American Institute of Certified Public Accountants coexists(एक साथ होना) with the Public Company Accounting Oversight Board (PCAOB) that regulates audit(हिसाब-किताब की जांच) firms. In the US, its market regulator Securities and Exchange Commission (SEC) oversees the regulator of accounting firms. “When Congress created the PCAOB, it gave the SEC the authority to oversee the PCAOB’s operations, to appoint or remove members, to approve the PCAOB’s budget and rules, and to entertain appeals of PCAOB inspection(निरीक्षण/मुआयना) reports and disciplinary(अनुशासनात्मक/) actions,” says the SEC site. India needs to emulate(प्रतियोगिता करना/बराबरी करना) this functional logic in defining regulatory hierarchies(पदानुक्रम/अनुक्रम). NFRA’s powers to investigate chartered accountants and audit firms of all listed companies and large unlisted companies could overlap with powers that Sebi has sought to act against errant(भटका हुआ) auditors. NFRA should function as an arm of Sebi.

 

Important Vocabulary

 

1.Perils(जोखिम/ आशंका)
Synonyms: hazard, insecurity, jeopardy, menace, pitfall
Antonyms: certainty, protection, safety, safeness, security

2.Statutory(व्यवस्था से स्थापित/वैधानिक)
Synonyms: lawful, legal, judicial, rightful
Antonyms: illegal, illegitimate, illicit, unlawful

3.Proliferation(प्रसार/तीव्र वृद्धि)
Synonyms: generation, procreation, propagation, reproduction

4.Fiduciaries(ज़िम्मेदार व्यक्ति)
Synonyms: curator, depositary, guardian, trustee

5.Coexists(एक साथ होना)
Synonyms: coincide, synchronize, exist side-by-side

6.Emulate(प्रतियोगिता करना/बराबरी करना)
Synonyms: follow suit, imitate, mimic, mirror, challenge
Antonyms: neglect

7.Errant(भटका हुआ)
Synonyms: aberrant, erratic, offending, stray, unorthodox
Antonyms: normal, correct, righteous

8.Inspection(निरीक्षण/मुआयना)
Synonyms: analysis, checkup, inquiry, investigation, probe
Antonyms: ignorance, neglect

 

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