The government is set to form a ten-member regulatory body to monitor financial reporting by firms, a move that will put an end to doctoring of accounts by listed companies and reassure prospective investors.

The decision, which came after a delay of over a year owing to opposition by chartered accountants, was taken at yesterday's cabinet meeting.

The move comes after the Asian Development Bank recently asked for the passage of the Financial Reporting Act by this month or else it would not release the $150 million fund for capital market devel-

opment, a finance ministry official said.

The ten-member council will fix the standards and ethics for chartered accountants and auditors, according to the Financial ReportingBill 2014. It will also formulate necessary rules and regulations to monitor auditing practices and ensure that standards set by the International Accounting Standards Board and International Auditing and Assurance Standards Boards are abided with. The law will be applicable to all public interest entities, including the corporates, public companies, government autonomous bodies, NGOs, banks, financial and insurance institutions.

The government will appoint the chairman and the executive director of the council on the basis of the recommendation of a search committee. The council will have four departments: standard setting, financial reporting monitoring, audit practice review and enforcement.

Any auditor or auditing firm that does not enlist with the council will not be allowed to certify accounts of any public interest entity or provide any audit-related services.

The government will also form an appellate board styled Accounting and Auditing Appellate Authority.

Initiated in 2008 by the immediate past caretaker government as the Financial Reporting Ordinance 2008, the law could not be passed due to pressure from various quarters.