Institute of Chartered Accountants of India (ICAI) is seeking more power for its financial reporting review board (FRRB), which will enable it to bring to book the auditor and the firm for flouting accounting principles. The central council of ICAI will meet on May 13 to take a final call on the issue.
The FRRB, which is a non-standing committee, reviews financial statements of enterprises to determine compliance with the accepted accounting principles in the preparation and presentation of financial statements, disclosure requirements, statutes and rules and reporting obligations of the enterprise as well as the auditor. We will soon take it up with the concerned ministry, Amarjit Chopra, president, ICAI told FC on Thursday.
In case, it is proved that an auditor colluded with the party in some accounting practices, ICAI needs to bring the audit firm to book as well. At present, we can only initiate action against the erring auditor as an individual, not the firm, he said.
Even if we set up a high-powered committee, that committee needs to have sufficient power to call for all relevant information from the concerned company. Otherwise the whole purpose of instituting a committee gets defeated. There are many such clauses where we are seeking amendments, which will give the much needed power to the institute, he said.