FRRB Observations | Key Non-compliances Observed in the Financial Statements of Banks
- Blog|News|Account & Audit|
- 2 Min Read
- By Taxmann
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- Last Updated on 1 June, 2023
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The Financial Reporting Review Board (FRRB) of the Institute of Chartered Accountants of India (ICAI) plays a vital role in ensuring that organizations’ general-purpose financial statements adhere to generally accepted accounting principles (GAAP). The board also examines auditors’ compliance with reporting obligations and the disclosure requirements set by regulatory bodies, statutes, and relevant rules and regulations. Through its review process, the FRRB identifies and resolves non-compliance issues in financial reporting, with the goal of improving the overall quality and accuracy of financial statements. In this discussion, we will examine some of the key non-compliances and errors observed by the FRRB in the financial statements of banks.
EOM para in Auditors Report
a) Reporting Issue: An Independent Auditor’s Report contains ‘emphasis of matters’ paragraph which read as follows:
“Without qualifying our opinion, we draw your attention to:
Concerns are raised regarding continuance “Going Concern” status of the Bank. However, the Bank feels that it continues to remain a “Going Concern” in view of the following:
In view of the above, the Bank has prepared the accounts on “Going Concern” basis. (Refer Note No. XX)
Our opinion is not qualified in respect of this matter.“
b) FRRB Opinion: The auditor has given the emphasis of matter paragraph on appropriateness of going concern assumptions is not in line with SA 570 (revised). When the auditor has decided to give an unmodified opinion on the financial statements, therefore, instead of giving emphasis of matter, auditor should have given a separate paragraph on ‘Material Uncertainty Related to Going Concern’ in independent auditor’s report rather than the emphasis of matter paragraph.
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