The Financial Reporting Council (FRC) is a statutory body established under the Financial Reporting Act 2004 (FRA – the Act). The FRC is Mauritius’ independent regulator responsible for broad oversight of the process for setting accounting, auditing and corporate governance standards and codes as well as monitoring and developing the quality and integrity of financial reporting and disclosure of public interest entities (PIEs), of corporate governance and audit in Mauritius.
2. FRC Objectives
According to Section 4 of the FRA, the main objectives of the FRC are to:
(a) promote the provision of high quality reporting of financial and non-financial information by public interest entities;
(b) promote the highest standards among licensed auditors;
(c) enhance the credibility of financial reporting; and
(d) improve the quality of accountancy and audit services.
3. The Functions of the Council
The functions of the Council shall be to:
(a) promote the provision of high quality reporting of financial and non-financial information by public interest entities by:
(1) laying down financial reporting, accounting and auditing standards
(2) ensuring compliance with the standards issued by the IASB and the IFAC;
(b) promote the highest standards among licensed auditors by:
(1) licensing auditors and establishing and maintaining a register of licensed auditors
(2) monitoring the practice of auditors with a view to maintaining high standards of professional
(3) conducting practice reviews of licensed auditors
(c) enhance the credibility of financial reporting by:
(1) monitoring the truth and fairness of financial reporting;
(2) monitoring and enforcing compliance with financial reporting, accounting and auditing standards;
(3) monitoring compliance with the reporting requirements specified in the Code of Corporate Governance and in any other guidelines issued by the National Committee on Corporate Governance (NCCG);
(4) reviewing the financial statements and reports of a public interest entity
(5) enforcing compliance with this Act and the rules of the Council by conducting investigations and where appropriate, imposing sanctions on licensed auditors, public interest entities and officers of such entities;
(d) improve the quality of accountancy and audit services by:
(1) ensuring co-ordination and cooperation with international institutions in the development and enforcement of financial reporting, accounting and auditing standards
(2) participating in, and initiating the organisation of, activities which promote education and training in the fields of accounting and auditing;
(3) providing advisory, consultancy and informational services on any matter related to its (FRC) functions
(4) encouraging, and where appropriate, financing research into any matter affecting financial reporting, accounting, auditing, and corporate governance
(e) and undertake such other actions as to achieve the objectives of this Act by:
(1) establishing and administering such systems or schemes as the Council may consider necessary or expedient for the discharge of its functions;
(2) engaging in any activity, either alone or in conjunction with any other organisation or agency, whether local or international, that is connected with or that is conducive to the discharge of its functions;
(3) advising the Minister generally on any matter relating to financial and non-financial reporting, accounting and auditing; and
(4) performing such other duties or functions as the Council deems necessary for the purpose of this Act.
In the fulfilment of its functions, the FRC may establish committees and /or enter Memorandums of Understanding with relevant bodies. It will also establish a Register of Licensed Auditors and an auditor registry and licensing process.
4. The FRC Panels
To ensure the achievement of the objectives and functions of the FRC as described above, the FRC will establish four panels of experts.
- a Financial Reporting Monitoring Panel (FRMP);
- an Audit Practice Review Panel (APRP); and
Each Panel operates within a framework set out in the Act.
5. FRC Powers
To ensure the achievement of the objectives and functions of the FRC as described above, the FRC has wide ranging powers, including:
- the capacity to issue standards, codes and guidelines relating to financial reporting, accounting and auditing;
- the capacity to impose fees or charges and to levy fees or charges for services and facilities provided by the Council;
- the capacity to enter contracts, to raise loans or to borrow money in the discharge of its functions
6. FRC Accountability
The FRC is accountable to the Parliament of Mauritius, through the Minister responsible for Corporate Affairs. The Minister shall, at the earliest available opportunity, lay a copy of the annual report before the National Assembly.
The Council shall submit to the Minister an annual report on its affairs and functions during that financial year, within 4 months of the close of its financial year. The report shall include:
- a copy of its audited annual financial statements, together with the report of the Director of Audit thereon;
- an overview of the activities of the Council, including the activities of the Hearing Committee;
- an account of the extent to which the objects of the Council have been achieved in that financial year;
- a profile of the members of the Council, their attendance of meetings of the Council, and their remuneration; and
- a profile of the Chief Executive Officer, the senior employees and members of the Committees and Panels, and their respective remuneration.
The Council shall ensure that its annual financial statements are prepared in accordance with the standards set out under this Act or any regulation made under the Act and shall be audited by the Director of Audit.
The period starting from the commencement of this Act to 30 June in the next year shall be deemed to be the first financial year, that is 30 June 2006.
7. FRC Accountability for Reports from Other Entities Prescribed Under the Act
In addition to the report described in 5.0 above, the FRC is accountable to the Parliament of Mauritius, through the Minister responsible for Corporate Affairs, for providing reports on the activities of the National Corporate Governance Committee (NCCG), the Mauritius Institute of Directors (MIoD) and the Mauritius Institute of Professional Accountants (MIPA) also. These bodies will develop their reports on their activities and such reports are to be provided to the National Assembly, together with those required directly form the FRC through the FRC.