Financial Reporting Review              Board of ICAI             - An Overview           By CA K. Raghu          Central ...
Formation of the Financial     Reporting Review BoardThe Council of the Institute of CharteredAccountants of India constit...
Scope of FRRBPrimary Activity   Review of General Purpose Financial Statements    of enterprises selected suo motto or as...
Review of GeneralPurpose Financial   Statements
Review of General Purpose Financial  Statements and auditor’s Report thereon                   by FRRBThe FRRB reviews the...
Selection of Enterprises for ReviewThe FRRB may review the general purposefinancial statements and the auditor’s reportof ...
Suo motto Selection Procedure Criteria based on factors like     • Industrial Classification     • Networth     • Turnove...
Procedure for ReviewObtaining the financial statements selected for review: It is generally obtained either by writing di...
Procedure for ReviewAction, if any, Non-Compliance observed: In case,the FRRB finds any non-compliance, it isclassified i...
Procedure for ReviewIn cases where material non-compliance are observedby the Board which affects the true and fair view o...
Review of Public Sector          Undertakings.The Review Group’s Report on a PublicSector Undertaking (PSU) is furnished t...
ConfidentialityThe Board shall be bound to keep all thematters referred to it as well as any otherinformation, papers, doc...
Other Activities
Creating awareness and understanding of  Reporting requirements among users of            Financial Statementso Publicatio...
Conducting Seminars/Training     Programmes/WorkshopsThe Board conducts various Seminars/Training programmes/ Workshops at...
Clarification on Technical Issues There could be accounting and auditing  issues that may require a clarification -  FRRB...
Statistics - Review of General     Purpose Financial StatementsSo far, the FRRB has selected 547 enterprisesfor review, ou...
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Financialreportingoverviewppt 121001071038-phpapp02

  1. 1. Financial Reporting Review Board of ICAI - An Overview By CA K. Raghu Central Council Member, The Institute of Chartered Accountants of India
  2. 2. Formation of the Financial Reporting Review BoardThe Council of the Institute of CharteredAccountants of India constituted theFinancial Reporting Review Board (FRRB)in July 2002.
  3. 3. Scope of FRRBPrimary Activity Review of General Purpose Financial Statements of enterprises selected suo motto or as special case.Other Activities Creating awareness and understanding of compliance with ASs, AASs, Statement on CARO, 2003 and reporting obligations relevant to various enterprises among the users of Financial Statements. Conducting National Workshops / Seminars.
  4. 4. Review of GeneralPurpose Financial Statements
  5. 5. Review of General Purpose Financial Statements and auditor’s Report thereon by FRRBThe FRRB reviews the general purposefinancial statements of certain enterprises andauditor’s report thereon with a view todetermine, to the extent possible: Compliance with the generally accepted accounting principles in the preparation and presentation of financial statements; Compliance with the disclosure requirements prescribed by regulatory bodies, statutes and rules and regulations relevant to the enterprise; and Compliance with the reporting obligations of the auditor.
  6. 6. Selection of Enterprises for ReviewThe FRRB may review the general purposefinancial statements and the auditor’s reportof the following enterprises:Enterprises selected either suo motto orEnterprises referred to it by any regulatory body like, Reserve Bank of India, Securities and Exchange Board of India, Insurance Regulatory and Development Authority, Ministry of Company Affairs, etc orEnterprises wherein serious accounting irregularities have been highlighted by the media reports.
  7. 7. Suo motto Selection Procedure Criteria based on factors like • Industrial Classification • Networth • Turnover Random Sampling Method Avoiding Enterprises that have been reviewed during last five years
  8. 8. Procedure for ReviewObtaining the financial statements selected for review: It is generally obtained either by writing directly to the enterprise concerned or from other reliable sources like Stock Exchanges / Registrar of Companies.Conducting Review:  Stage I: by a single Chartered Accountant, Technical Reviewer  Stage II: by a group of Chartered Accountants, at a city level, Financial Reporting Review Group
  9. 9. Procedure for ReviewAction, if any, Non-Compliance observed: In case,the FRRB finds any non-compliance, it isclassified in the following categories: Non-compliance, not so material Material Non-complianceIn cases where non-compliances, not somaterial, are observed by the Board which donot affect the true and fair view of financialstatements, the FRRB would appropriatelybring the non-compliance to the attention ofthe auditor.
  10. 10. Procedure for ReviewIn cases where material non-compliance are observedby the Board which affects the true and fair view offinancial statements, it mayAction against the Auditor(s): refer the case to theDirector (Discipline) of the Institute of CharteredAccountants of India for initiating action against theauditor under the Chartered Accountants Act, 1949.Action against the Enterprise: Insofar as themanagement of the enterprise is concerned, pendingthe grant of relevant powers to the FRRB by theGovernment of India, the FRRB would informirregularity to the regulatory body relevant to theenterprise.
  11. 11. Review of Public Sector Undertakings.The Review Group’s Report on a PublicSector Undertaking (PSU) is furnished to theOffice of Comptroller and Auditor Generalof India (C&AG) and the C&AG’scomments along with the Report of theReview Group (on the particular PSU) isconsidered by the Board
  12. 12. ConfidentialityThe Board shall be bound to keep all thematters referred to it as well as any otherinformation, papers, documents, etc, receivedduring the course of the review confidential.Similar confidentiality conditions shall alsoapply to the members of the Review Groupsand the Technical Reviewers associated withthe Board.
  13. 13. Other Activities
  14. 14. Creating awareness and understanding of Reporting requirements among users of Financial Statementso Publication in the Journal : To publish educative article on the major non compliances observed in the review process and also host a list of non compliances on the website of the Institute without disclosing identity.o Publication: The Board has released a Publication ‘A Study on compliances of Financial Reporting Requirements’ during the Council Year 2009-10.
  15. 15. Conducting Seminars/Training Programmes/WorkshopsThe Board conducts various Seminars/Training programmes/ Workshops at variousregional branches to impart training to themembers of the Institute for review of thegeneral purpose financial statements of theenterprises and finally to empanel them withthe Board.
  16. 16. Clarification on Technical Issues There could be accounting and auditing issues that may require a clarification - FRRB does not have any power to issue such clarifications. If the FRRB is of the opinion that the issue may require a clarification, it may refer the issue to the appropriate committee of the Council for consideration.
  17. 17. Statistics - Review of General Purpose Financial StatementsSo far, the FRRB has selected 547 enterprisesfor review, out of which 100 cases have beenreferred to the Director (Discipline) of theInstitute and/ or to the relevant regulators andfor 201 cases appropriate note on non-compliances have been issued to the auditorsof the enterprises which have been observedby the Board during the review of the financialstatements of such enterprises.
  18. 18. THANK YOU

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