Significant Achievements

Significant Achievements Council Year 2020-21

About FRRB

Financial Reporting Review Board (FRRB) was constituted in July 2002, by the ICAI as its non-standing committees as a proactive measure to improve the financial reporting practices in the Country and to improve the quality of audit by the Chartered Accountants. The Board comprises of members of the Central Council of the ICAI including Government of India nominee. The Board also had the privilege of the representations from the office of the Securities and Exchange Board of India (SEBI), Comptroller and Auditor General of India (C&AG), Insurance Regulatory and Development Authority (IRDA) during the Council Year.

Initiatives towards Partner in Nation Building
FRRB as an important and influential tool

After functioning for more than 18 years, the FRRB has become an established mechanism for monitoring compliance by reporting enterprises.

  • ICAI FRRB conducts holistic review of the financial statements with a view to determine compliance with:
    • Accounting standards (IGAAP and Ind AS)
    • Standards on Auditing
    • Guidance Notes on Schedule II and III to the Companies Act, 2013
    • Various Guidance Notes on Accounting and Auditing
    • Industry Specific Guidance Notes viz Rate Regulated Industry, Coal Industry, Telecom etc.
    • Expert Advisory Opinion
    • ITFG Bulletins (clarification on issues related to implementation of Ind AS)
    • Master Circulars issued by RBI from time to time
    • Implementation Guide/Educational Material on Ind AS and Standards on Auditing
  • Considering FRRB as an effective mechanism, various regulators (viz, MCA, SEBI, C&AG, ECI) referred cases to FRRB for review of financial statements.
  • In case ICAI-FRRB finds any material or significant non-compliance affecting true and fair view of the financial statements (selected as suo motto or as special case), it refers the case to concerned regulators i.e. MCA, RBI, IRDA, CAG, DD (ICAI) etc. Thus, it is acting as an agency for all concerned regulators, that endeavors to improve transparency in financial reporting.
  • ICAI’s alliance with regulators like Ministry of Corporate Affairs, Election Commission of India (ECI), Comptroller and Auditor General of India (C&AG), Insurance and Regulatory Development Authority of India (IRDA) would prove to be instrumental in improving the financial reporting practices in India.

Status of review of cases referred by Regulators In its endeavour to support regulators as well as to bring transparency in financial reporting, during the year the FRRB has undertaken, as special cases, review of 44 general purpose financial statement and auditor’s reports thereon of various enterprises as referred by regulators, based on media reports and other references received which are on different stages of review.

ECI had requested the Board to undertake review of the annual audited accounts of at least 6 National political parties and recognized parties with income/ expenditure exceeding Rs. 10 Crore. Accordingly, the Board has undertaken the review of 8 annual audited accounts of political parties, as referred by ECI from time to time.

Cases reviewed during the year

The FRRB is playing a paramount role in improving the financial reporting practices prevailing in India. It is functioning quiet effectively and independently to the entire satisfaction of the stakeholders’ especially regulatory bodies.

During the year, the Board has completed review of 74 financial statements among other agendas. Out of these 74 cases, 15 cases have been referred to relevant regulators and Director (Discipline) for further action and in 42 cases, Board decided to issue advisory to the auditor of the enterprise.

Cases considered and finalised by the Board Cases referred to Director (Discipline) of ICAI for further action where serious non-compliances observed Cases referred to Regulators (MCA, RBI) Issued advisories to the auditors
15 (21%)
15 (21%)
42 (57%)
  • The cases completed during the period include review of 10 financial statements undertaken as special cases and 36 Ind-AS based Financial Statements.
  • FRRB is also in the process to complete the review of financial statements of 206 enterprises selected on suo motto basis or as special case. Out of these, the preliminary review of 169 enterprises (Tier I) has been completed by technical reviewers and review of 113 enterprises (Tier II) has been completed by Financial Reporting Review Groups.
Important Events

‘Two Day National Webinar on Commonly Found Non-compliance of Financial Reporting Requirements’ observed in Financial Statements prepared under Ind AS framework, was held on 6th November, 2020 (Friday) 2:00 PM to 5:30 PM, and 7th November, 2020 (Saturday) 11:00 AM to 2:00 PM. CA. Atul Gupta, President, ICAI, CA. Nihar Jambusaria, Vice-President, ICAI, CA. Aniket Talati, Chairman, FRRB, CA. Babu Kalliyavalli, Vice Chairman, FRRB, CA. Hansraj Chugh, Member, FRRB also graced the event with their benign presence and shared their words of wisdom with the participants. This programme was well attended and by 20000 participants (approx.) and was appreciated by participants.

Initiatives for the Members/Students
Webinars, Seminars, VCMs and Programme on ‘Commonly Found Non-compliances of Financial Reporting Requirements’ observed in Financial Statements prepared under Ind AS framework

To spread the awareness amongst the members about the pertinent issues in the areas of reporting as well as to apprise them about the common non-compliances observed by the Board during review of various financial statements various webinar and programmes were held, the details of which are as follows:

  • A webinar on ‘’Commonly Observed Errors in Application of Accounting Standards’’ has been conducted jointly with ASB on 15-18 June 2020, to enhance the knowledge of members of the ICAI in the area of application of Accounting Standards (IGAAP).
Virtual CPE Meeting
  • “Virtual CPE Meeting on Financial Reporting – Aspects and Analysis”, was organized by FRRB on 20thDecember, 2020 from 11:00 AM to 06:00 PM and hosted by WIRC of ICAI. This programme was well attended by more than 280 participants.
Seminar/ programme
  • Seminar on “Commonly observed errors in Financial Statements with respect to Accounting Standard” at Rajkot was organized by FRRB on January 16, 2021. This programme was well attended by 116 participants.
  • eminar on Commonly found Non-compliance on Accounting Standards in Schedule II and III of Companies at Gandhidham was held on January 17, 2021. This programme was well attended by 44 participants.
  • “Seminar on Financial Reporting: Aspects and Analysis” On 20th December, 2020 was organized by FRRB and hosted by Bhubaneswar Branch of EIRC of ICAI. The programme was well attended by more than 100 participants.
  • One Day Seminar on CARO – 2020 has been organised at Sivakasi Branch of SIRC of ICAI on March 7, 2020 and was well attended by 53 members.
Twitter Handle-FRRB

In order to spread awareness among the members regarding the non-compliances observed by FRRB and to give regular updates on the same, a twitter account for FRRB has been created in August 2020 wherein ‘Did you know?’ series is going on. Till date, there are 43 tweets on the errors observed on the compliance related to Accounting Standards. A tremendous response has been received on FRRB’s twitter account with more than 2000 followers.

Release of Publications

A publication on “Study on Compliance of Financial Reporting Requirements (Ind AS Framework)” has been released on ICAI Annual Day 2021 to enhance the knowledge of preparers and auditors of the financial statements. It contains pertinent observations of the Board in context of Ind AS, Standards on Auditing and applicable Guidance Notes as well as other relevant Laws and Statutes. This publication would provide guidance to the members and other stakeholders, so as to enable them to implement these Standards (Ind AS) in the spirit in which these have been formulated.

Development of Web Portal for FRRB: Automation of FRRB workflow using Artificial Intelligence

FRRB is gearing up for another milestone towards technological advancement by way of utilising Artificial Intelligence to systematically identify the non-compliances in financial statements to make the review process more robust.

The proposed system will have capability of Artificial Intelligence/ Analytics so that common non-compliance can be flagged using system AI on the basis of XBRL financial statements of the enterprise. System will also be having following features:

  • Enable the automation of workflow of FRRB between various review levels.
  • Maintain repository of non-compliances observed by the Board, and
  • Monitoring of the review work would also be included in the web portal.

The Publications of FRRB, Articles in Journal, Videos and presentations of past events / webcasts, list of forthcoming events of FRRB, Technical Reviewer empanelment form etc. would also be part of such system/portal.

Over the period, it would help to scale up the number of cases being undertaken for review as well as in strengthening financial reporting practices in India which would promote stakeholder’s confidence in audited financial statements.

FRRB had invited the vendors for Development, Commissioning and Maintenance of web portal For Financial Reporting Review Board (FRRB) Of ICAI through ‘Request for Proposal’. Considering the technical and commercial evaluation process including POC (Proof of Concept) selected bidder has been engaged for the development services.