Composition

A2.

The FRSIC is a committee of the MIA comprising a number of people of standing in the field of financial reporting.

A3.

The FRSIC consists of up to 8 members experienced in the technicalities of financial reporting. The membership includes:

-	five members appointed by MIA Council, one of whom is the President or Vice President of MIA, who will be the Chairman;
-	three members from professional bodies recognised under Part II of the First Schedule to the Accountants Act 1965 contributing technical support ;
-	five representatives from regulators and standard setter, namely SC, BNM, BM, SSM and MASB as observers to FRSIC

A4.

The MIA may adjust the size and composition of the FRSIC from time to time. However the number of committee members shall be set at a minimum of seven (7). Membership is personal; members vote in accordance with their own independent views, not as representatives voting according to the views of the firm, organisation or constituency with which they are associated.

A5.

Each member is entitled to appoint a named alternate; any such appointment and subsequent changes of appointment shall be notified to the Secretary of the MIA. Except for alternate nominated by the professional bodies, the named alternate may attend but such alternate does not have the right to vote. If neither the member nor his named alternate is able to attend, the member may appoint another alternate to attend that meeting and shall inform the Secretary of the MIA in advance of the meeting, but such alternate does not have the right to vote. Each member is also entitled to appoint one other as assistant and acting as observer.

A6.

Observers are to provide FRSIC with the views of the regulatory agencies which they represent in terms of issues relating to the application of accounting standards, enforcement and compliance with accounting standards and other issues relevant to the agenda of the FRSIC. Observers have a status equivalent to members of the FRSIC for the purpose of their rights and contributions at meetings. They can contribute to discussion in the meeting by providing feedback and examples on areas requiring consensus. However, observers do not have the right to vote although they have the right to be heard.

A7.

The office of Chairman of the FRSIC shall be held by the President or Vice President of MIA and they will appoint the other member of the FRSIC after due consultation.

A8.

The Chairman may invite others to attend FRSIC meetings as observers.

Admission of items to the agenda

A9.	Auditors and companies, and others with an interest in financial reporting, are invited to refer substantial new issues to the FRSIC where there is doubt about the most appropriate accounting treatment and it is important that a standard treatment should be established before a precedent is set by practice.
A10.	The Council of MIA invites its members to raise for possible consideration by the FRSIC any substantial accounting issues of general concern that arise in connection with the preparation and audit of financial statements. In raising such issues members should not disclose information of a confidential nature either directly or by implication to anyone likely to be aware of the background. Such matters should also be on points of principle and not solely relevant to a specific company.
A11.	The FRSIC will not consider any issue that the MASB indicates falls within its own agenda unless specifically requested to do so by the MASB.
A12.	The FRSIC has the prerogative to disregard issues raised if it feels that the issues are not within the scope of FRSIC. (See template for submission of issue in Appendix A)

Quorum

A13.	The quorum for a meeting of the FRSIC is 75% of the total composition i.e. six (6) out of eight (8) voting members present in person or by telecommunications.

Meetings and voting

A14.	Voting shall take place at the meetings . A consensus is necessary for the approval of a Consensus for ratification and issue by the MIA.
A15.	A consensus will have been attained at a meeting of the FRSIC where not more than two voting members of the FRSIC present at the meeting dissent from the treatment proposed as the appropriate accounting practice for the matter in question.
A16.	The Chairman has a vote.
A17.	Meetings of the FRSIC shall be chaired by the Chairman of the FRSIC or in his absence the Technical Director of the MIA, or such other person as the Chairman may nominate, shall preside as chairman of the meeting.
A18.	Discussions of the meeting will be minuted. However, views presented by the Observers will not be regarded as the official view of the organisation he/she represents.

Authority of FRSIC Consensus

A19.

FRSIC Consensus are guidance issued by MIA and should be regarded best practice. It should be read in conjunction with accounting standards.

A20.

The Council of MIA expects its members who assume responsibilities in respect of financial statements to observe FRSIC Consensus until replaced by accounting standards or otherwise withdrawn. The Council have agreed that:

(a)

where this responsibility is evidenced by the association of members' names with such financial statements in the capacity of directors or other officers other than auditors, the onus will be on them to ensure that the existence and purpose of FRSIC Consensus are fully understood by fellow directors and other officers. Members should also use their best endeavours to ensure that FRSIC Consensus are observed and that any significant departures found to be necessary are adequately disclosed and explained in the financial statements.

(b)

where members act as auditors or reporting accountants, they should be in a position to justify significant departures to the extent that their concurrence with the departures is stated or implied. They are not, however, required to refer in their report to departures with which they concur, provided that adequate disclosure has been made in the notes to the financial statements.

A21.

MIA, through appropriate committees, may enquire into apparent failures by its members to observe FRSIC consensus or to ensure adequate disclosure of significant departures.

Scope and application of FRSIC Consensus

A22.	FRSIC Consensus need not be applied to immaterial items. Nothing in the FRSIC Consensus is to be construed as amending or overriding the accounting standards or other statements adopted or issued by the MASB or other relevant laws.
A23.	As with accounting standards it is important when applying FRSIC Consensus to be guided by the spirit and reasoning behind them. The spirit and reasoning are set out in the individual FRSIC Consensus (and are based on the MASB's Statement of Principles for Financial Reporting). FRSIC Consensus are intended to be as concise as the nature of a particular topic allows rather than detailed rules dealing with every conceivable circumstance.
A24.	Where FRSIC Consensus prescribe information to be contained in financial statements, such requirements do not override exemptions from disclosure given by law to, and utilised by, certain types of entity.

Compliance with FRSIC Consensus

A25.	FRSIC Consensus are guidance issued by MIA and should be regarded best practice. It should be read in conjunction with accounting standards. FRSIC Consensus consequently may be taken into consideration by the Financial Statement Review Committee (the FSRC) of MIA in deciding whether financial statements call for review.
A26.	The FSRC has procedures for receiving and investigating complaints regarding the annual accounts of companies in respect of apparent departures from the accounting requirements of the companies' legislation including the requirement to give a true and fair view.
A27.	Members of MIA are expected to observe compliance to the consensus issued. In exceptional circumstances where departure is necessary, members should be prepared to justify the departure.

Dissemination and implementation

A28.	The FRSIC Consensus are made publicly available by the MIA for the guidance of users, preparers and auditors of financial information. They include a discussion of the matter without identifying individual's views, the accounting issues identified, reference sources, and a summary of the FRSIC's deliberations, and clearly indicate what conclusion has been reached.
A29.	A FRSIC Consensus takes effect 3 months from the date of its issuance, and is thereafter to be regarded as accepted practice in the area in question. Accordingly, all reporting entities will be expected to conform to it, if necessary by changing previously adopted accounting policies, unless the consensus explicitly states otherwise.

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