The Indian Institute of Management, Bangalore (IIMB) on Tuesday announced that its professor R. Narayanaswamy, faculty of the Finance & Accounting area, has been appointed as the Chair of the Technical Advisory Committee of the National Financial Reporting Authority (NFRA), the independent accounting and auditing regulator set up by the Government of India under the Companies Act, 2013.
Responding to Businesstoday.in on what the role will entail and what he would like to focus on, Narayanaswamy says: "The Technical Advisory Committee (TAC) advises the National Financial Reporting Authority (NFRA) on how it can fulfill its mandate to protect the public interest and the interests of investors, creditors and other users of corporate financial statements. As the Chair of the TAC, I am expected to lead the Committee's efforts by establishing priorities and making recommendations in consultation with the executive body. I think the NFRA would expect me to give objective and independent advice that would be useful in its regulatory activities. This is my personal view."
Talking about one thing that he most certainly wants the technical advisory committee to focus on, he says: "The numerous accounting scandals in recent years have dented the credibility of auditing. Among others, they have raised serious questions about auditor independence and audit quality. Therefore, strengthening auditor independence and improving audit quality would seem like a good place to start. The aim should be to address the serious trust deficit in auditing urgently. Then there is the issue of what audit is all about. If audit is not meant to detect a large-scale accounting fraud, investors wonder what it is for. These are just examples of what I think would be important matters for the TAC."
How binding could the recommendations of the technical advisory committee be? He says that the TAC is an advisory body. "The fact that the NFRA has thought it necessary to appoint this committee suggests that its recommendations will be considered earnestly. Of course, the final decision will be taken by the NFRA."
In a separate note shared by the IIMB, which shares the news of his appointment, professor Narayanaswamy is quoted as saying: "This is definitely the best assignment of all I could get in my life because I have campaigned for an independent regulator for over three decades."
Prof. Narayanaswamy has been with IIMB since 1986. He is a graduate in commerce of St. Joseph's College, University of Madras, and has a PhD in Accounting from the University of New South Wales, Sydney. He is a member of the Institute of Chartered Accountants of India, the Institute of Cost Accountants of India and the Institute of Company Secretaries of India. He holds the ICAI's Diploma in Management Accountancy. His current research interests include corporate disclosure policy, earnings management, corporate governance, and auditing. In July 2006, Business Today named him one of top three professors in IIMB and one of the top nine business school professors in India.