New Manpower Criteria for Public Interest Entities

New Manpower Criteria for Public Interest Entities

October 24, 2023.

The Financial Reporting Council (“FRC”) has recently issued new regulations (SRO No. 291/AIN2023) that expand the definition of a Public Interest Entity. The Public Interest Entity (Based on Minimum Manpower) Definitions Regulations, 2023 were released on October 19, 2023.

What are the new regulations?

The new regulations define a Public Interest Entity based on the minimal number of people employed. The FRC defines a Public Interest Entity as an entity or institution that employs at least 50 individuals.

What does’manpower’ imply in this context?

In these regulations,’manpower’ refers to any individual employed by an Entity or establishment on a permanent, temporary, casual, contractual, or outsourcing basis, whether salaried or profit sharing. The word ‘corporation or institution’ refers to any person or entity formed under any legislation and registered or licensed under any law.

How will these regulations be enforced?

The FRC or an authorized officer may order Entities to submit a variety of papers, including a list of employees, appointment rules, salary list, payroll, account statement, financial statement, audit report, and others. These documents will be needed to verify the number of people employed by the entity.

If the FRC is satisfied with the information and documentation provided, it will designate the Entity as a Public Interest Entity. However, if an Entity fails to provide the requested information or documents, the FRC may pursue legal action against it.

These new standards will bring more organizations under the FRC’s supervision, and they are supposed to increase transparency and accountability.