Financial Reporting Review Board (FRRB)

  • October 21, 2022
  • Posted by: OptimizeIAS Team
  • Category: DPN Topics
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Financial Reporting Review Board (FRRB)

Subject : Economy

Context:

The Financial Reporting Review Board (FRRB ) is likely to review edtech major  BYJU’S financial statements and look into the alleged irregular accounting practices– including the delayed filing and revenue recognition from “streaming services”.

Concept:

Filing of financial statements by private companies: 

  • As a part of Annual Filing, Companies (with few exceptions) incorporated under the Companies Act 1956 or Companies Act 2013, are required to file eForms with the Registrar of Companies (ROC) for following purposes:
    • filing Balance Sheet
    • filing Profit & Loss Account
    • filing Annual Return by Companies having share capital
    • filing Compliance Certificate by Companies having paid up capital of Rs. 10 lakh – Rs. 2 crore
    • filing Annual Return by Companies not having share capital
    • filing financial statement and other documents
    • filing statement containing salient features of consolidated financial statement of a group etc..
  • By the current legal framework private companies need to file their financial statements with the MCA (Ministry Of Corporate Affairs) within 30 days of holding the annual general meeting .
  • The AGM has to be held within six months of the end of the financial year.

Financial Reporting Review Board 

  • It is a non-standing committee of the Council of the Institute of Chartered Accountants of India.
  • The FRRB was constituted by the Council at its 226th meeting held in July 2002. 
  • The objective of the Board is to review the compliance with the accounting and auditing standards issued by the Institute of Chartered Accountants of India.
    • The Board, however, restricts its reviews to the published general-purpose financial statements only.
  • The reviews by the Financial Reporting Review Board would not be verification of the entire audit (re-audit) or review of working papers of the auditors concerned.
  • Functions:
    • 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;
    • Compliance with the reporting obligations of the enterprise as well as the auditor.
economy Financial Reporting Review Board (FRRB)