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Presentation on:
Investigating into corporate fraud’s under
companies act , NFRA, IBBI.

Submitted To
Mrs Prathima Girish
Department of management
HRIHE hassan
A corporate fraud occurs when a company or an entity
deliberately changes and conceals sensitive information
which then apparently makes it look healthier.
Companies adopt various modus operandi to commit such
corporate frauds, which may include miss-information in
the prospectus, manipulation of accounting records, debt
hiding etc.
 Financial frauds
 Misappropriation of assets
 corruption
 The companies act, 2013, is the legislation which
focuses on issues related to corporate frauds. Fraud
in relation to affairs of a company or any corporate
body as defined in S.447 of the companies act 2013,
includes any act, omission, concealment of any fact
or abuse of position committed by any person or any
other person with the connivance in any manner,
with intent to deceive, to gain undue advantage
from, or to injure the interests of the company or its
shareholders or its creditors or any other person,
whether or not there is any wrongful gain or
wrongful loss.
 Punishment for fraud (S.447)
 Punishment for false statement (S.448)
 Punishment for false evidence (S.449)
 Punishment where no specific penalty or
punishment is provided (S.450)
 Punishment in the case of repeated default (S.451)
 Adjudication of penalties (S.454)
 NFRA is a Quasi Judicial Body established to
regulate aspects related to accounting and
auditing .
 An independent Regulator to regulate the
Accounting and Auditing.
 NFRA shall have same powers as a civil court
under the Code of Civil Procedure,1908
 The idea is inspired by the Sarbanes Oxley Act
2002 of the US and is in line with
Internationally accepted global practices like in
US ,UK and china.
After the Satyam scandal took place in 2009, the standing
committee on finance proposed the concept of the
National Financial Reporting Authority(NFRA)for the
first time in its 21st report. COMPANIES ACT 2013
then gave the regulatory framework for its
composition and constitution The Union Cabinet
approved the proposal for its establishment on 1march
2018. The establishment of NFRA as an independent
regulator for the auditing profession will improve the
transparency and reliability of financial statements and
information presented by listed companies and large
unlisted companies in India.
 To investigate either sue motto or an a reference made
by Central Government , for such class of bodies
corporate or persons , into the matters of professional
or other misconduct committed by any member or firm
of CA, registered under the CA Act 1949.
 Powers shall be same like a civil court under the code
of civil procedure 1908 while trying a suit in respect of
the following matters namely:-
 Discovery and production of books a account and other
documents ,at such place and at such time as may be
specified by the NFRA.
 Summoning and enforcing the attendance of persons
and examining them on oath
 Inspection of any books , registers and other
documents of any person referred in clause (b)
at any place
 Issuing commission for examination of witness
or documents.
 The NFRA Authority shall consist of :-
 A chairperson to be appointed by the Central
Government and
 Member not exceeding fifteen consistingof part
time and full time members .
The chairperson and members ,who are in full
time employment with NFRA shall not be
associated with any audit firm (including
related consultancy firms)during the course of
their appointment and 2 years after ceasing to
hold such appointment.
Central Govt ,is empowered to constitute a NFRA
to provide for matters relating to accounting
and auditing standards under this Act.
a) Make recommedations on the formulations and laying
down of accounting and auditing policies and
standards for adoption by:-
* companies or
*Class of companies or
*Their auditors
 b) monitor and enforce the compliance with accounting
standards and auditing standards
 C) oversee the quality of service of the professions
associated with ensuring compliance with such
standards and suggest measures required for
improvement in quality of service and such other
related matters as may be prescribed;
 D) perform such other functions relating to
clauses(a),(b)and(c) as may be prescribed.
 What is IBBI?
IBBI insolvency bankruptcy board of India it is
the single regulatory body whose job is to
oversee the processes , the personnel and the
adjudicating bodies related to insolvency and
 The insolvency resolution professionals
 The insolvency professional agencies
 The adjudicating authorities
 The information utility
 It is comprised of 10 members
 1 chairman
 1 member nominated by RBI
 3 members of central government
 5 members nominated by central government
 Defragmentation of insolvency and
bankruptcy laws
 Fast insolvency resolution
 Different adjudicating authorities