India – April 2026: Excellence Enablers has highlighted important corporate governance considerations arising from the National Financial Reporting Authority (NFRA) Circular issued on January 7, 2026, on effective communication between statutory auditors and Those Charged With Governance (TCWG), including Audit Committees.

The Circular focuses on improving communication between statutory auditors and those responsible for overseeing governance. It refers to the responsibilities of the Board of Directors, Independent Directors, Audit Committees and auditors under the Companies Act, 2013 and relevant auditing standards.

A key issue discussed is the role and composition of TCWG. The Board of Directors has overall responsibility for governance under the Companies Act, 2013. The source notes that the constitution of TCWG should therefore not reduce or change the statutory responsibility of the Board.

The Circular also emphasises the importance of effective two-way communication. Rather than auditors simply presenting their observations to Audit Committees, TCWG are expected to ask questions, seek clarification and engage more actively with auditors.

Another important consideration is the proposed role of a nodal officer in communication with statutory auditors. While a CFO may help provide information and management perspectives, the source highlights that communication with auditors should also bring an independent Board perspective.

The discussion further points to the importance of maintaining clarity around strategic matters and responsibilities. Strategy is ultimately a matter for the Board, with management support, and the involvement of auditors should not blur these responsibilities.

Excellence Enablers also stresses that improving audit quality is important, but regulation should remain practical and proportionate. Identifying existing shortcomings in the audit process and strengthening relevant processes may provide a more effective approach than creating excessive procedural requirements.

The broader message is that corporate governance depends not only on regulations and formal structures but also on meaningful communication, questioning and accountability. Boards and Audit Committees need to understand their responsibilities and engage constructively with auditors to strengthen governance and audit quality.

Excellence Enablers is a corporate governance specialist organisation focused on adding value to governance processes rather than merely promoting a box-ticking approach.