SEBI ON AUDIT REPORTS
The SEBI has decided to introduce a mechanism to process qualified annual audit reports filed by the listed entities with stock exchanges and annual audit reports where accounting irregularities are pointed out by Financial Reporting Review Board of the Institute of Chartered Accountants of India (ICAI-FRRB). The listed entities would be required to file annual audit reports to the stock exchanges along with the applicable forms and after preliminary scrutiny, exchanges will refer these reports to the Qualified Audit Report Review Committee set up by SEBI. In cases where the qualifications are significant and explanation of the company is unsatisfactory, the same would be referred to the ICAI-FRRB. If ICAI-FRRB opines that the qualification is justified, SEBI may mandate a restatement of the accounts of the company and requires the company to inform the same to the shareholders by making the announcement to stock exchanges.