Proposalsamplefromcapgemini 13316039760571 Phpapp02 120312211734 Phpapp02
Financialreportingoverviewppt 121001071038-phpapp02
Click here to load reader
-
Upload
ca-k-raghu -
Category
Documents
-
view
160 -
download
0
Transcript of Financialreportingoverviewppt 121001071038-phpapp02
Financial Reporting Review
Board of ICAI - An Overview
By CA K. Raghu Central Council Member,
The Institute of Chartered Accountants of India
Formation of the Financial Reporting Review Board
The Council of the Institute of Chartered Accountants of India constituted the Financial Reporting Review Board (FRRB) in July 2002.
Scope of FRRB
Primary 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.
Review of General Purpose Financial
Statements
Review of General Purpose Financial Statements and auditor’s Report thereon
by FRRBThe FRRB reviews the general purpose financial statements of certain enterprises and auditor’s report thereon with a view to determine, 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.
The FRRB may review the general purpose financial statements and the auditor’s report of 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.
Selection of Enterprises for Review
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
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 Stage III: by the Board
Procedure for Review
Action, if any, Non-Compliance observed: In case, the FRRB finds any non-compliance, it is classified in the following categories: Non-compliance, not so material Material Non-compliance
In cases where non-compliances, not so material, are observed by the Board which do not affect the true and fair view of financial statements, the FRRB would appropriately bring the non-compliance to the attention of the auditor.
Procedure for Review
In cases where material non-compliance are observed by the Board which affects the true and fair view of financial statements, it may
Action against the Auditor(s): refer the case to the Director (Discipline) of the Institute of Chartered Accountants of India for initiating action against the auditor under the Chartered Accountants Act, 1949.
Action against the Enterprise: Insofar as the management of the enterprise is concerned, pending the grant of relevant powers to the FRRB by the Government of India, the FRRB would inform irregularity to the regulatory body relevant to the enterprise.
Procedure for Review
Review of Public Sector Undertakings.
The Review Group’s Report on a Public Sector Undertaking (PSU) is furnished to the Office of Comptroller and Auditor General of India (C&AG) and the C&AG’s comments along with the Report of the Review Group (on the particular PSU) is considered by the Board
Confidentiality
The Board shall be bound to keep all the matters referred to it as well as any other information, papers, documents, etc, received during the course of the review confidential. Similar confidentiality conditions shall also apply to the members of the Review Groups and the Technical Reviewers associated with the Board.
Other Activities
Creating awareness and understanding of Reporting requirements among users of
Financial Statements o 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.
Conducting Seminars/Training Programmes/Workshops
The Board conducts various Seminars/ Training programmes/ Workshops at various regional branches to impart training to the members of the Institute for review of the general purpose financial statements of the enterprises and finally to empanel them with the Board.
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.
Statistics - Review of General Purpose Financial Statements
So far, the FRRB has selected 547 enterprises for review, out of which 100 cases have been referred to the Director (Discipline) of the Institute and/ or to the relevant regulators and for 201 cases appropriate note on non-compliances have been issued to the auditors of the enterprises which have been observed by the Board during the review of the financial statements of such enterprises.
THANK YOU