1.0 Status of Procedures
These procedures are to be applied in the light of the Financial Reporting Act 2004, the Guidance Notes of the Enforcement Panel/Review Committee and the Policies adopted by the FRC in respect of enforcement. They are not intended to be exhaustive and highlight particular issues only. These procedures are subject to be reviewed as and when the need arises.
2.0 Procedures of Enforcement Panel
2.1 Identification of Matters for Enforcement Panel (EP) Action:
(a) The EP recommends action to be taken against the following party(ies), either collectively or individually, as circumstances warrant:
(i) Public Interest Entities (PIEs);
(ii) Officers and directors of PIEs;
(iii) Licensed auditors and
(iv) Firms of licensed auditors.
(b) The matters identified for action by the EP and the party(ies) responsible shall be based on the findings and recommendations of the monitoring panels or the Council.
2.2 Determination of Action and Notification
(a) Within 15 days, upon receipt of the findings and recommendations from the monitoring panels, the EP will review the matter and determine whether notification to the subject party(s) is appropriate and, if so, prepare the form of notification and determine the appropriate action to be taken.
(b) The determination of whether notification will be made and the appropriate action will be based on:
(i) the provisions of the Act, regulations and rules made hereunder;
(ii) compliance with financial reporting and auditing standards;
(iii) compliance with the Code of Corporate Governance;
(iv) the severity of the reported offence and
(v) the frequency of violations by the party(ies).
3.0 Procedures of the Review Committee
(a) Any PIE or licensed auditor or audit firm wishing to raise an objection to the decision of the Enforcement Panel shall, within 14 days of being notified of the decision, lodge the objection in writing with the Council, specifying the grounds of objection (Section 22 of FR Act).
(b) The Council shall, within 14 days of the receipt of the objection, set up an ad-hoc Review Committee and refer the objection and reasons for the objection to the Review Committee (Section 23 of FR Act).
(c) In considering the objection and the reasons for the objection, the Review Committee may require the relevant party(ies) to make written representations within 14 days of being notified.
(d) Where the party fails to make representations as required within the 14 day period, the Review Committee may, on good cause shown by the party, extend the delay for making written representations.
3.1 Determination by Review Committee
(a) The Review Committee shall make a determination on cases referred to it within 60 days from the date on which its members are appointed.
(b) Any determination shall be made by a simple majority of the members of the Committee.
(c) The Review Committee shall submit its report on findings and recommendations to the Council.
(d) The Council shall endorse the recommendation of the Review Committee, unless it considers that the recommendation is manifestly unreasonable.
(e) The Council shall as soon as is reasonably practicable inform the party having lodged an objection of its final decision.