New Delhi: The Institute of Chartered Accountants of India (ICAI) has constituted a seven-member financial report review board (FRRB) that has been empowered to suo motu look into the published accounts of different organisations, including banks and financial institutions.

The FRRB findings on the deficiencies and irregularities observed, if any, would be sufficient enough for initiating action under the disciplinary mechanism of the institute, says ICAI president Ashok Chandak.

ICAIs existing regulatory system for triggering the scrutiny of its members role in alleged corporate frauds had recently come under intense debate. ICAI, which is also the regulator of the chartered accountancy profession, has been till recently taking a position that the institute is not empowered to suo motu seek information about the financial statements of a company.

The institute has already recommended amendments in the Chartered Accountants Act, 1949, to the central government to enable FRRB to exercise such powers that are already vested in a civil court. FRRB is keen to empower itself with power for discovery and production of any document from the organisation concerned.

Sources say FRRB would, pending amendments in the Act, start discharging its functions without some of the special powers that are vested in a civil court.

Chartered accountant Amarjit Chopra is the chairman of FRRB. The seven-member board also includes G C Srivastav, joint secretary, revenue department (Central Board of Direct Taxes), and Rajiv Mehrishi, joint secretary, Department of Company Affairs (DCA).

Curiously, ICAIs move to set up a FRRB comes at a time when DCA has been toying with the idea for constituting an independent panel of experts, which would at random scrutinise financial statements of companies and ensure that follow-up action is taken on the qualifications made by the auditors in their reports.