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The National Financial Reporting Authority (NFRA) has been working to implement a mechanism for auditors which could help them to keep their files safe in a tamper-proof way.
The authority has been looking for a similar mechanism like DigiLocker which caters to individuals.
Wiser from the experience, NFRA has been contemplating the use of technology to curb possible manipulation of records by auditors. The law requires auditors to complete their audit files and bars them from tampering it in any form later. Regulatory agencies such as NFRA exercise oversight only of the audit files and in case it is compromised, the oversight is not effective.
The regulation authority has been planning to mandate that the audit files be archived electronically with time stamps placed on the documents similar to the DigiLocker mechanism. Although stored in a neutral place, the access of all the records will be with the audit firms. Whenever NFRA wants to access the documents, it will seek access and the firm concerned will be required to share it.
In case, any additions are made, they cannot be deleted. Also, the records of these additions will be available. The NFRA has been tasked with monitoring and enforcing compliance of accounting & audit standards and overseeing the quality of service, as per TOI report.
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