FRRB now looks at low audit fees and negative reserve parameters

Seeking to further improve quality, the chartered accountants’ body ICAI’s Financial Reporting Review Board (FRRB) has introduced new parameters of low audit fees and negative reserves for reviewing the financials of companies.

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FRRB conducts the review of financial statements of companies to assess compliance with Accounting Standards, Standards on Auditing, Schedule II and III of the Companies Act, 2013, among others. It also assesses compliance with various guidance notes on accounting and auditing, and master circulars/directions issued by the Reserve Bank of India (RBI).

‘High levered, ‘negative reserves, ‘low audit fees’ and ‘companies under Insolvency Resolution Process (IRP)’ are new parameters that are in place now for FRRB for carrying out the review of companies’ financials, according to a senior ICAI functionary.