Significant Achievements
Significant Achievements Council Year 2023-2024
The inception of the Financial Reporting Review Board (FRRB) in July 2002 marked a pivotal step by the Institute of Chartered Accountants of India (ICAI) to proactively enhance financial reporting practices in the country. Functioning as a non-standing committee, FRRB plays a paramount role in elevating the quality of financial reporting and audit processes conducted by Chartered Accountants.
Charged with the responsibility of reviewing general-purpose financial statements across diverse enterprises, FRRB diligently assesses the extent of compliance with generally accepted accounting principles in the preparation and presentation of financial statements. Furthermore, it evaluates adherence to disclosure requirements stipulated by regulatory bodies, statutes, and relevant regulations impacting the enterprise. The Board ensures compliance with reporting obligations of both the enterprise and its auditors.
It comprises members of the Central Council, ICAI, including a nominee from the Government of India. Notably, the Board has the privilege of representations from various regulators such as the Securities and Exchange Board of India (SEBI), Comptroller and Auditor General of India (C&AG), Central Board of Indirect Taxes and Customs (CBIC) and Insurance Regulatory and Development Authority (IRDA) during the Council Year. This collaborative engagement underscores the FRRB’s comprehensive approach for shaping a robust financial reporting landscape in India.
SIGNIFICANT ACHIEVEMENTS
PARTNER IN NATION BUILDING- SUPPORTING REGULATORS – REVIEW OF CASES REFERRED BY REGULATORS
In its endeavor to support regulators as well as to bring transparency in financial reporting, during the year FRRB has undertaken, as special cases, review of 17 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.
The Board supports various regulators viz Election Commission of India (ECI) in the review of annual audited accounts of political parties and Ministry of Corporate Affairs (MCA), Office of the Comptroller & Auditor General of India (C&AG) and other regulators by undertaking the review of cases as referred by them from time to time.
FRRB’S REVIEW COVERING 70% OF MARKET CAPITALISATION
FRRB has undertaken review of companies representing around 70% of market capitalisation, in last 3 years.
CASES REVIEWED DURING THIS PERIOD
The Board has completed review of -105 financial statements among other agendas. Out of these 105 cases, 18 cases have been referred to relevant regulators and/ or Director (Discipline) for further action and in 53 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, SEBI) | Issued advisories to the auditors |
| 105 | 18 (17%) | 16 (15%) | 53 (51%) |
- Review of special cases and Ind AS financial Statements:
- I am trying to call member regarding a disclosure issue , but the member did not respond.
- Review in Process:
- FRRB is also in the process to complete the review of financial statements of 149 enterprises selected on suo motto basis or as special case. Out of these, the preliminary review of 113 enterprises (Tier I) has been completed by technical reviewers and review of 62 enterprises (Tier II) has been completed by Financial Reporting Review Groups.
- Entities referred by regulators: MCA, SEBI, C&AG, ECI
- Suo Moto selection of the companies on the basis of Turnover / Net Worth covering entire gamut of companies spread across all the major sectors of the economy
- Companies for which accounting irregularities are highlighted in media reports
- Nifty 100 and Nifty 500 companies
- Entities in respect of which letter of advisory has been sent by FRRB to auditors, previously
- Based on the list of companies under liquidation received from IBBI
- Whistle-blower complaints received by FRRB which are within the ambit of its Terms of Reference
WEB PORTAL OF FRRB: AUTOMATION OF FRRB WORKFLOW, REPOSITORY AND RULE BASED ANALYTICS
FRRB introduced its web portal in January 2022 as a strategic move towards automating workflow processes and leveraging rule-based analytics for the identification of common non-compliances based on XBRL financial statements. The portal serves the purpose of streamlining operations and establishing efficiency in the FRRB’s functions.
To ensure a seamless transition, extensive online training sessions were conducted for Technical Reviewers and members of Financial Reporting Review Groups (FRRGs) and the portal is now actively facilitating the review process for current-year cases at various stages.
COMPREHENSIVE REPOSITORY OF NON-COMPLIANCES
Important Events
National
CHAIRMAN, FRRB ALONG WITH CHAIRMAN, NFRA ADDRESSED AT PHDCCI
CA. Hans Raj Chugh, Chairman, FRRB and Central Council Member of ICAI along with Dr. Ajay Bhushan Pandey, Chairman, NFRA addressed in the seminar on “The changing dynamics of the Ind AS and Companies Act, 2013: “Issues and Challenges in Implementation” held on October 13, 2023. The event was organized by the PHD Chamber of Commerce and Industry. The purpose of the seminar was to discuss the recent changes in the Indian Accounting Standards (Ind AS) and Companies Act, 2013, and their impact on financial statements. Additionally, key observations of NFRA and FRRB relating to disclosures in the financial statements were highlighted during the seminar.
Initiatives for the Members
IDENTIAL PROGRAMMES FOR REVIEWERS OF FRRB AT MUMBAI AND AMRITSAR
To update the Technical Reviewers (TRs) and members of Financial Reporting review Group (FRRGs) on Ind ASs and equip them with the necessary skills required to review the Ind AS based financial statements ‘2 Day Residential Workshop for Technical Reviewers and FRRG Members’ were organized by FRRB on October 7-8, 2023, at Mumbai and on June 2-3, 2023, at Amritsar. CA. Hans Raj Chugh, Chairman, FRRB, CA. Durgesh Kumar Kabra, CCM, Member FRRB and Former Chairman of FRRB, CA. Nilesh S. Vikamsey, Past President, ICAI, Past Chairman, FRRB, CA. Shriniwas Y. Joshi, Past CCM of ICAI and Past Chairman of FRRB, CA. Priti Paras Savla, CCM of ICAI, CA. Piyush S. Chhajed, CCM of ICAI graced the Mumbai event with their benign presence.
The programme at Amritsar was addressed by CA. Hans Raj Chugh, Chairman, FRRB, CA. Kemisha Soni, Vice-Chairperson, FRRB and CA. Amarjit Chopra, Past President, ICAI. Empanelled reviewers from all five regions, including Northern, Southern, Eastern, Western, and Central, participated in the Mumbai program. Whereas empanelled reviewers from Northern region participated in Amritsar programme. The main objective of organizing such workshop is to further strengthen the review mechanism and to acquaint TRs and FRRGs with major non-compliances observed by the Board. The programme was well appreciated by the participants. TWITTER HANDLE-FRRB – @FRRBICAI With more than 4000 followers, ‘Did you know?’ series is going on wherein
With more than 4000 followers, ‘Did you know?’ series is going on wherein 457 tweets on the errors observed on the compliance related to Accounting Standards (Ind AS and IGAAP) have been posted.
A new initiative has been taken to update the members on various non-compliances observed during the review of the Financial Statements. A mass mail is being sent to members from time-to-time basis. Seven mass mails have been sent to members on:
- ‘’Commonly found Non-compliances in Financial Statements of Banks’’ on 15th February 2023, and 11th May 2023,
- “Commonly found Non-compliances in Financial Statements of Companies – Auditor’s Report and CARO, 2016” on 16th June 2023 and 11th August 2023,
- “Commonly found Non-compliances in Financial Statements of Companies – Assets” on 19th September 2023.
- “Commonly found Non-compliances in Financial Statements of Companies – Equity and Liabilities” on 21st November 2023.
- “Commonly found Non-compliances in Financial Statements of Companies – Statement of Profit and Loss” on 09th January 2024.
AWARENESS PROGRAMME ON ‘COMMONLY FOUND NON-COMPLIANCES OF FINANCIAL REPORTING REQUIREMENTS’ OBSERVED IN FINANCIAL STATEMENTS
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 “Upskill Knowledge on Financial Reporting Practices” were organised at Goa, Navi Mumbai, Thane, Raipur, Kannur, Bharuch, Ratlam, Jabalpur, Amritsar, Bhilai, Ludhiana, Sonipat and EIRC. These programmes were well attended by the participants.Selected photographs
CA. Hans Raj Chugh, Chairman, FRRB along with Dr. Ajay Bhushan Pandey, Chairman, NFRA addressed the event on “The changing dynamics of the Ind AS and Companies Act, 2013” organised by PHD Chamber of Commerce and Industry, New Delhi.
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 “Upskill Knowledge on Financial Reporting Practices” were organised at Goa, Navi Mumbai, Thane, Raipur, Kannur, Bharuch, Ratlam, Jabalpur, Amritsar, Bhilai, Ludhiana, Sonipat and EIRC. These programmes were well attended by the participants.
‘2 Day Residential Programmes for Reviewers of FRRB’ were organized at Jio World Convention Centre, Mumbai and at Taj Swarna Hotel, Amritsar.
21st World Congress of Accountants – ICAI Pavilion – FRRB
21st World Congress of Accountants was a momentous event for the global accountancy profession which, interalia, exhibited ICAI Pavilion showcasing roles of ICAI in six zones. These zones were namely ‘ICAI Regulating the CA Profession’, ‘ICAI – Partner in Nation Building’, ‘ICAI Standards Setter’, ‘ICAI for Fiscal Discipline’, ‘ICAI – Educator par Excellence’. The ICAI pavilion proved to be a good branding exercise for ICAI and provided an opportunity to various committees of ICAI to showcase their activities of global relevance.
FRRB-ICAI has also contributed in ICAI pavilion under the aegis of ‘’ICAI Regulating the CA profession’’. To encourage the delegates and make it interactive, quiz has been conducted through flashcard mode, wherein questions related to common non-compliances observed in context of IGAAP, Ind AS, CARO, Standards on Auditing, Companies Act were asked. The FRRB’s publication ‘’Study on Compliances with Financial Reporting Requirements (Ind AS Framework) – Volume II has been given to delegates to enable improvement in the financial reporting practices and as a token of remembrance of this mega event.
Initiatives for the Members
2 Day Training Programme for Technical Reviewers and FRRG Members as AKAM activity at Hyderabad and Mumbai
To update the Technical Reviewers (TRs) and members of Financial Reporting review Group (FRRGs) on Ind ASs and equip them with the necessary skills required to review the Ind AS based financial statements ‘2 Day Residential Workshop for Technical Reviewers and FRRG Members’ were organized by FRRB on May 12-13, 2022 at Mumbai and August 25-26, 2022 at Hyderabad. In Mumbai programme, CA. Durgesh Kumar Kabra, Chairman, FRRB, CA Abhay Chhajed, Vice Chairman, FRRB, Adv Vijay Kumar Jhalani, Government Nominee and member, FRRB graced the event with their benign presence and shared their words of wisdom with the participants. CA. Chandrashekhar Vasant Chitale, CCM & Member, FRRB, CA. Priti Paras Savla, CCM were also present along with Chairman, WIRC and Secretary, WIRC. The programme at Hyderabad was addressed by CA. Durgesh Kabra, Chairman, FRRB, Adv. Vijay Kumar Jhalani, Government Nominee and Member, FRRB, Mr. Sanjay Purao, Special invitee on Board from SEBI and CA. Dayaniwas Sharma, CCM and Member, FRRB. The reviewers from the Western Region were invited to attend the programme at Mumbai and the reviewers based in Southern and Eastern region were invited to attend the programme at Hyderabad. The main objective of organizing such workshop is to further strengthen the review mechanism and to acquaint TRs and FRRGs with major non-compliances observed by the Board. The programme was well appreciated by the participants.
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 with 3,600 followers as on date. Till date, 305 tweets on the errors observed on the compliance related to Accounting Standards (Ind AS and IGAAP) have been posted.
Awareness Programme on ‘Commonly Found Non-compliances of Financial Reporting Requirements’ observed in Financial Statements
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 Awareness programmes on “Financial Reporting Practices” were organised at Goa, New Delhi, Sonipat, Jabalpur, Surat, Ratlam, Bhopal, Chengalpattu, Sivakasi and Thiruvananthapuram. These programmes were well attended by the participants.