The government is considering putting in place a National Financial Reporting Authority (NFRA) to regulate audit quality.

While Companies Act 2013 has provided for NFRA as a regulatory agency for audit, accounts and financial reporting, Section 132 of the law has remained on paper as the rules are yet to be notified. "It is one of the few sections of the law that has not been notified yet," a source told financial daily Economic Times.

The law provides for NFRA to look into matters of professional or other misconduct and also suspend CAs and firms from practising for six months to 10 years, the Economic Times said. Sources said various options were being considered for the agency and a new mechanism for appeal was also being looked at.

Prime Minister Modi had during his speech on the foundation day of ICAI on July 1, called for creating four big Indian accounting firms that are counted among the world's Big 8, even as he cautioned CAs against misuse of their all-powerful signature. He said the signature of a chartered accountant is more powerful than even that of a Prime Minister and the government also believes the accounts signed by them.

He noted that just 25 rogue auditors had faced action in over a decade and around 1,400 cases were pending. "Like the lawyers did during the freedom struggle, I urge the CAs to take the lead in the journey towards India's economic growth," he said. "We will always remember how the community of professionals took a lead during the freedom struggle of India," he added.

In a stern warning to black money hoarders, Modi pointed out that 37,000 shell companies indulging in tax evasion have been detected and more than three lakh firms are under the scanner for suspicious dealings.

The impact of the government's steps on checking black money is clear from the latest figures of Swiss banks, which show that Indians' money parked there has dipped to a record low, the Prime Minister added.

"The government has cancelled registration of over 1 lakh companies in a single stroke and more than 37,000 shell firms have been identified for strong action," he said. He appealed to the chartered accountant community to inform anybody they know with unaccounted wealth in their possession, that they would not be spared.