NFRA to expand FY26 audit firm inspections to 35–40 companies

The National Financial Reporting Authority (NFRA) has announced plans to significantly increase its inspections of audit firms, targeting 35 to 40 companies in the fiscal year 2025-26. This initiative aims to enhance the quality of financial statement audits by identifying deficiencies and recommending areas for improvement. The forthcoming inspection reports are intended to establish a standard for statutory audits, serving as a guideline for best practices in the auditing profession. However, the NFRA will not disclose the names of the companies being inspected, maintaining a level of confidentiality in its operations. This move comes in the wake of increasing scrutiny over audit practices in India, particularly after high-profile corporate scandals that have raised questions about the reliability of financial reporting. By expanding its oversight, the NFRA seeks to bolster investor confidence and ensure compliance with regulatory standards in the financial sector.