NFRA: 948 Audit Firms Miss FY2025 Filing Deadline
By Business Desk
The National Financial Reporting Authority (NFRA) flags 948 audit firms, primarily small and mid-sized, for failing to submit crucial NFRA-2 annual returns for FY2025.
The National Financial Reporting Authority (NFRA) has identified 948 audit firms that failed to submit their mandatory NFRA-2 annual returns for the fiscal year 2025. An additional 41 firms submitted incomplete filings, highlighting significant non-compliance within the auditing sector.
Prevalence of Non-Compliance
These non-compliant firms are predominantly small and mid-sized entities, a group often under closer scrutiny for regulatory adherence. The NFRA-2 return is a critical tool for the authority’s oversight responsibilities.
A total of 948 audit firms failed to submit their NFRA-2 annual returns for FY2025. Furthermore, 41 audit firms submitted incomplete NFRA-2 filings, indicating partial adherence. The original deadline for these FY2025 submissions was November 30, 2025, though the filing window currently remains open.
Purpose of NFRA-2 Annual Returns
The NFRA-2 annual return serves as a vital mechanism for the National Financial Reporting Authority to monitor and ensure audit quality across India. This mandatory filing provides a detailed snapshot of an audit firm’s operational data and compliance status.
Specifically, the return captures information on audit engagements undertaken by the firm, details on audit fees charged, and data regarding audit partners. It also reports on the firm’s overall compliance with regulatory standards.
By collecting this data, NFRA gains insights into the landscape of audit work, enabling better enforcement of professional standards. This oversight is crucial for maintaining public trust in financial reporting.
Exemptions for Larger Firms
Notably, domestic affiliates of the Big Four audit firms are not present on this list of non-filers. These larger entities are already subject to a distinct regulatory process involving annual inspections by the NFRA.
The continued availability of the filing window suggests NFRA aims to encourage compliance rather than immediately penalize, though the high number of non-filers underscores ongoing challenges in regulatory adherence among smaller firms.