1. The National Financial Reporting Authority constituted section 132 of The Companies Act, 2013 has the power to investigate, either suo moto or on a reference made to it by Central Government, for such class of bodies corporate or persons, in such manner as may be prescribed into the matter of professional or other misconduct committed by any member or firm of chartered accountants, registered under the Chartered Accountants Act, 1949.
2. Where proceedings are instituted by NFRA, it shall bar the Institute of Chartered Accountants of India or other body to initiate or continue any proceedings in such matters of misconduct.
3. “profession or other misconduct” for the purpose of above mentioned investigation by the NFRA shall have the same meaning assigned to it under Section 22 of the Chartered Accountants Act, 1949.
4. The NFRA shall have the same powers as are vested in a civil court under the Code of Civil Procedure, 1908, while trying a suit, in respect of the following matters, namely:-
(i) discovery and production of books of account and other document, at such place and time as may be specified by the NFRA.
(ii) summoning and enforcing the attendance of persons and examining them on oath.
(iii) inspection of any books, registers and other documents of any person at any place.
(iv) issuing commissions for examination of witnesses or documents.
5. Where professional or other misconduct is proved, the NFRA shall have power to make order for imposing penalty or debarring the member or the firm from engaging himself or itself from practice as a member of ICAI.
6. In case of individuals, the penalty shall not be less than Rs. 1 lakhs but extend to 5 times of fees received.
7. In case of firms, the penalty shall not be less than Rs. 10 lakhs but extend to 10 times of fees received.
8. In case of debarring the member or the firm from engaging himself or itself from practice as a member of ICAI, the minimum period shall be six months or for such higher period not exceeding 10 years to be decided by the NFRA.
9. The Central Government may constitute an Appellate authority for hearing appeals arising out of the orders of the NFRA.
10. The Appellate authority shall consist of a chairperson and not more than two other members to be appointed by the Central Government.
11. Any person aggrieved by any order of the NFRA may prefer an appeal before the Appellate Authority mentioned above in such manner as may be prescribed.
12. The fee for filing appeal shall be such as may be prescribed.
13. The provisions of The Companies Act, 2013 override the provisions of the Chartered Accountants Act, 1949 and thus limit the powers of investigation of the Disciplinary Directorate, Board of Discipline and the Appellate Authority constituted under the Chartered Accountants Act, 1949.