Significant Achievements of Financial Reporting Review Board for the Year 2010-11
Review of General Purpose financial statements and Auditors’ Report thereon:
During the Council Year 2010-11, the Board had undertaken the review of following cases:
- 100 enterprises on a suo motto basis;
- 18 enterprises as special cases ; and
- To complete the review of 60 enterprises, which were selected during the Council Year 2009-10.
In order to accomplish the objective of completing the review of aforesaid 178 enterprises, technical review of 175 enterprises was completed by the Technical Reviewers. Out of which, the preliminary review reports of 160 enterprises were allotted to Financial Reporting Review Groups (FRRGs) for further review. During the year, the FRRGs had submitted the review report on 125 enterprises, out of which 6 reports are being send to C&AG for their consideration. Out of remaining 119 enterprises, the Board had completed the review of 101 enterprises.
Review of General Purpose Financial Statements of the IPL franchisees
As a proactive measure, the Board had undertaken the review of general purpose financial statements of eight IPL franchisee enterprises, as special cases for review. On review of the financial statements of various IPL franchisees, the Board was of the view that there are certain material issues with regard to which the financial statements contain either no information or limited information. In the absence of such information, the Board was not in a position to provide its final opinion.
Therefore, the Board decided to request the Council to vest power on FRRB to call for additional information from the IPL franchisees concerned. Accordingly, an item relating to the same was placed for the consideration of the Council. The Council agreed with the recommendation of FRRB and authorised it to call for the requisite information directly from enterprises as well as auditors of various IPL franchisees so that it may reach to its final conclusion. As such, the appropriate letters were send to the concerned enterprises/ auditors requesting them to provide us the information. Accordingly, the requisite information has been received from four franchisees/ auditors and remaining enterprises and/ or auditors have either not replied to us or submitted the said information on the pretext that since the requisite information contains confidentiality covenants, therefore, it could not be shared with us.
In the last meeting, the Board had decided to send such additional information to the Technical Reviewer as well as the Financial Reporting Review Group, requesting them to provide their report on non – compliances observed in the general purpose financial statements of various franchisees alongwith the additional information as received from them.
On the receipt of the above-mentioned reports from Technical Reviewer as well as Financial Reporting Review Group, the Board endeavours to complete its review on IPL Franchisees at the earliest.
Revision of Selection Criterion Methodology: Since, the earlier selection criterion methodology as adopted by Financial Reporting Review Board was primarily based on the size of turnover, therefore, during the Council Year 2010-11, the selection criterion methodology was revised considering the other factors like size of their net worth, industrial classification of such enterprises, etc.
Selection of Enterprises for Review of General Purpose Financial Statements and Auditors’ Reports thereon for the Council year 2010-11: To expedite the review process in the Council Year 2011-12, the Board had selected 106 enterprises which would be reviewed by the Board in the Council Year 2011-12. The annual reports of 83 enterprises have already been collected from the reliable sources and for the remaining enterprises, a request has been send to the enterprises for their annual reports.
Articles in Institute’s Journal “The Chartered Accountant”: The Board had published an article on ‘Enhancing Audit Quality’ in the May, 2010 and on ‘Ensuring Overall Quality of General Purpose Financial Statements’ in the July, 2010 in issue of the Institute’s Journal, The Chartered Accountant.
Conduct of Training Programmes/Workshops: The Board had organised a conference on “Excellence in Audit & Financial Reporting” jointly with Auditing & Assurance Standards Board (AASB) at Udaipur on July 24, 2010 as well as Two- day “National Workshop on Compliance Aspects of Accounting Standards and Other Reporting Requirements” on 23rd -24th December, 2010, at Mumbai. 63 participants attended the programme.
Empanelment of Technical Reviewers: During the Council Year 2010-11, 76 additional members of the Institute had been empanelled on the Board, thereby, empanelling a total number of 290 Technical Reviewers on the Board.