The Cabinet on Thursday approved setting up of the National Financial Reporting Authority (NFRA), which will be an independent regulator for the auditing profession.

The decision comes against the backdrop of various auditing lapses in the banking sector, including the Rs 12,700 crore fraud at Punjab National Bank.

"The NFRA will act as an independent regulator for the auditing profession which was one of the key changes brought in by the Companies Act, 2013," Corporate Affairs Minister Arun Jaitley said.

The jurisdiction of the NFRA (which would be an oversight body for auditors) would extend to all listed companies as well as large unlisted public companies.

The regulator would have a chairperson and three full- time members. Besides, there would be a secretary.

Jaitley said NFRA would help in improving foreign and domestic investments as well as support globalization of business by meeting international practices.

Inputs From PTI