Financial Reporting Standards Council (FRSC)
Section 203 of The Companies Act, 2008 (Act No. 71 of 2008) establishes the Financial Reporting Standards Council (FRSC) which is responsible for, amongst others, receiving and considering any relevant information relating to the reliability of and compliance with financial reporting standards and advising the Minister on matters relating to financial reporting standards and consult with the Minister on the making of regulations establishing financial reporting standards, subject to the requirements as set out in section 29 (5).
The Minister must establish a Council, to be known as the Financial Reporting Standards Council consisting of
- Four persons, each of whom is registered and practicing as an auditor;
- Two persons, each of whom is responsible for preparing financial statements on behalf of public companies;
- Two persons responsible for preparing financial statements for private companies, or personal liability companies;
- Four persons whom, in their capacity as holders of securities issued by a company, or as creditors of a company, are reasonably expected to rely on financial statements, as contemplated in the definition of “financial statement” in section (1);
- Two persons knowledgeable in Company Law;
- One person nominated by the Executive Officer of the Financial Services Board as defined in the Financial Services Board Act, 1990 (Act No. 97 of 1990), or any successor body to it;
- One person nominated by the Governor of the South African Reserve Bank, or any successor body to it; and
- A number of persons, nominated one each by any exchange that imposes adherence to financial reporting standards as a listing requirement, each of whom must be appointed by the Minister, to serve for a term of three years.
The Minister must select candidates:
- With the qualifications, knowledge and experience necessary to further the functions of the council; and
- Appoint the Chairperson and Deputy Chairperson of the Council.
The Financial Reporting Standards Council must:
- Receive and consider any relevant information relating to the reliability of, and compliance with, financial reporting standards and adapt international reporting standards for local circumstances and consider information from the commission as contemplated in section 187(3)(b);
- Advise the Minister on matters relating to financial reporting standards; and
- Consult with the Minister on the making of regulations establishing financial reporting standards, subject to the requirements set out in section 29(5).