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1. What is Form NFRA 2? 

The National Financial Reporting Authority was constituted under Section-132 of the Companies Act,2013 in order to formulate and enforce specific laws and regulations in respect to auditing and financing. 

NFRA 2 is an annual return form filed with NFRA and it is filed by the auditor of the Indian body corporate and foreign body corporates which fall under Section-3(3). Category of Auditor(S) required to be reported by: 

a. Individual 

b. Firm 

c. Indian LLP 

d. Foreign LLP 

2. Why is it important? 

NFRA 2 is mandatory to be filed by the companies governed by the NFRA Rules under Rule 4. The companies need to file NFRA 2 within 210 from the deployment of this form and mention the following details:

● Whether the auditor has resigned from his post in any company/body corporate during the past three years. 

● The number of companies/ bodies corporate in which the auditor resigned during the past three years. 

● Whether the Auditor has withdrawn an audit report on financial statements, or withdrawn its consent to the use of its name in a report, document, or written communication in the past three reporting periods. 

● Number of companies/ bodies corporate in which such withdrawal took place during the past three years 

● A statement of the quality control policies and procedures of the Auditor for its auditing practise during the reporting period.

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