The Financial Reporting Council (“FRC”) has recently announced new regulations (SRO No. 291/AIN2023) that will broaden the definition of Public Interest Entity. These regulations, known as the Public Interest Entity (Based on Minimum Manpower) Definitions Regulations, 2023, were published on October 19, 2023.
What are these new regulations?
The new regulations define a Public Interest Entity based on the minimum number of manpower employed. According to the FRC, an Entity or institution must employ at least 50 people to be considered a Public Interest Entity.
What does ‘manpower’ mean in this context?
In these regulations, ‘manpower’ refers to any person employed in an Entity or establishment on a permanent, temporary, casual, contractual or outsourcing basis as salaried or profit sharing. The term ‘corporation or institution’ refers to anybody or institution established under any law or registered or licensed under any law.
How will these regulations be enforced?
The FRC or an authorized officer can order Entities to submit various documents such as a list of manpower, appointment rules, salary list, payroll, account statement, financial statement, audit report and more. These documents will be used to verify the number of manpower employed by the Entity.
If the FRC is satisfied with the submitted information and documents, it will list the Entity as a Public Interest Entity. However, if an Entity fails to supply the required information or documents, the FRC may take legal action against it.
These new regulations will bring more organizations into the purview of FRC and are expected to bring more transparency and accountability to those organizations.