The Financial Reporting Council (FRC), pursuant to the Financial Reporting Act (“FRA”), has the statutory authority and responsibility for ensuring, inter alia, that:
(i) the annual reports of every Public Interest Entity (PIE) comply with International Financial Reporting Standards (IFRS) and the disclosure and reporting requirements specified in the Code of Corporate Governance for Mauritius; and
(ii) licensed auditors and audit firms comply with the requirements of the FRA, and the rules and guidelines issued by FRC.
2.0 Setting up of an Enforcement Panel (EP) and a Review Committee (RC)
Sections 17 and 23 of the FRA provides for the setting up of an Enforcement Panel (EP) and the establishment of a Review Committee by the FRC respectively.
3.0 Functions of the EP
The functions of the EP, as specified in Section 21 of the FRA, are:
(i) to consider any findings and recommendations referred to it by the Financial Reporting Monitoring Panel (FRMP), the Audit Practice Review Panel (APRP), or the FRC;
(ii) to determine the appropriate action to be taken, on the basis of findings and recommendations referred in (i) above;
(iii) within 15 days of the receipt of the findings and recommendations referred to it under (i) above, to notify the PIE, the licensed auditor, as the case may be, of its decision.
4.0 Determination of action to be taken
The action determined by the EP under paragraph 3.0, subparagraph (ii) may include the imposition of measures to
(a) enforce compliance with financial reporting, accounting and auditing standards;
(b) enforce compliance with the FRA and the rules and guidelines issued by the FRC ;
(c) ensure compliance with the Code of Corporate Governance.
5.0 Powers of the EP
The EP will have such powers as have been assigned to it by the FRC under the FRA, including the power to -
(a) determine the appropriate action based on findings and recommendations referred to it by the Financial Reporting Monitoring Panel, the Audit Practice Review Panel or the FRC;
(b) notify the PIE , the licensed auditor of its decision.
6.0 Functions of the RC
Any objection raised by a PIE, a licensed auditor or an audit firm to the decision of the EP will be referred to a Review Committee within 14 days from the receipt of the objection.
7.0 Powers of the Council
Based on the decision of the EP, and as the case may be, of the Review Committee, the FRC has the power to impose appropriate sanctions as provided for in Sections 43 and 79 of the FRA.
8.0 Effective Date
These Guidance Notes are effective from 01 November 2012.