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 financial and non-financial reports of Public Interest Entities (PIEs) comply with International Financial Reporting Standards (IFRS) and the disclosure requirements of 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
Section 17 and Section 23 of the FRA provide for the setting up of an Enforcement Panel (EP) and the establishment of the Review Committee (RC) respectively.
2.1 The responsibilities of FRC include :
(a) performing annual report reviews of Public Interest Entities to verify compliance with International Reporting Standards and compliance with the National Code of Corporate Governance;
(b) performing audit practice reviews to verify compliance with International Auditing Standards and Code of Ethics;
(c) monitoring compliance with any rules and guidelines issued by FRC; and
(d) conducting investigations .
2.1.1 The Financial Reporting Monitoring Panel shall, where it identifies a failure on the part of the PIE, submit its findings and recommendations to the Enforcement Panel [(S 19(4)) of the FRA.]
2.1.3 The Council shall refer the findings of any investigation under section 78 to the EP for the determination of the appropriate sanction.
2.2 Responsibility of the Enforcement Panel
2.2.1 The Enforcement Panel shall, within 15 days from the receipt of the findings and recommendations –
(i) determine the appropriate action to be taken; and
(ii) notify thePIE, the licensed auditor or audit firm, as the case may be, of its decision.
2.3 Establishment of the Enforcement Panel
2.3.1 The Enforcement Panel shall consist of –
(a) 2 members appointed every year by the Council
(b) not more than 2 employees being of a grade not lower than Technical Executive
(c) such other persons having the necessary expertise as may be co-opted by the Enforcement Panel.
2.4 Enforcement Panel Meetings
The EP shall, within 15 days from the receipt of findings referred to it by the Financial Reporting Review Panel, the Audit Review Panel or the Council, determine the action to be taken.
Three members shall constitute a quorum.
2.5 EP Accountability, Transparency and Communications
The EP will report in writing its decision to the Chief Executive Officer of the FRC who will inform the Council.
2.6 The EP shall, within 15 days of the receipt of the findings and recommendations referred to in paragraph 2.4 notify the PIE, the licensed auditor or audit firm, as the case may be, of its decision.
2.7 Objections to decisions of Enforcement Panel
Any PIE or licensed auditor or audit firm who or which wishes to object to the decision of the EP shall, within 14 days of being notified of the decision, lodge his or its objection in writing with the Council, specifying the grounds of objection.
3.1 Establishment of Review Committee
The Council shall, within 14 days from the receipt of objection raised against the decision of the Enforcement Panel, establish a Review Committee.
The RC shall be appointed by the Council on such terms and conditions as it thinks fit.
3.2. Membership of the Review Committee.
The Review Committee shall consist of a Chairperson and two other members, who shall have not less than 10 years experience and knowledge in the field of business, finance, accountancy or law (see section 23(2) of the FRA).
3.3 Responsibilities of the Review Committee
The RC shall, within 60 days, from the date of its establishment by the Council, make a determination and report to the Council.