22 September 2014
A student who scores 90 plus marks till Standard XII and one who scores 80 plus marks in Accountancy till graduation; finds tough to clear very first paper of Accountancy with 60 plus marks in CA exams. There might be many reasons for poor marks in Accountancy but the most important reason is: The students don’t find accounting standards as interesting one to understand. The reason: its technical language. Without knowing the practical application of the accounting standards; in forthcoming days it would be a very tough task to audit the books of account. When the treatment of accounting transactions are not according to the accounting standards as desired; the accounting results would be rejected by the owners as well as other stakeholders (including Income-Tax Department for tax purposes). Recent amendments in Company Law Bill proposes heavy penalties if accounting results are not according to the accounting standards. Even chartered accountant’s membership is also liable to be cancelled. Due to its high technicality; the accounting standards are regular feature of CPE learning hours among qualified members. The interesting point is they are known as expert in accounting! Now one can understand why a qualified member engaged in the profession is known as PRACTICING CHARTERED ACCOUNTANT because everyday he has to learn something new. A “single query” when raised before the Institute’s Expert Advisory Committee regarding Accounting Treatment of a particular financial transaction; costs Rs.25,000/-. After a lot of research about Accounting Standards; what I found the easiest way to understand the provisions of various accounting standards is to refer PUBLISHED ACCOUNT OF CORPORATE SECTOR. So students and members must study in depth 5-10 PUBLISHED ANNUAL REPORTS OF CORPORATE SECTOR. The Most Important Point: To understand the practical treatment of accounting standards; one must refer NOTES ON ACCOUNTS very carefully. Due to recent development in Financial Reporting System ; each and every accounting standard’s treatment is required to be explained by the management and auditors are required to comment thereon. All these materials is covered in NOTES ON ACCOUNT section. By referring such published accounts; the students and members would know the practical application of various accounting standards. This will help the students to improve their presentation while appearing for the exams. Practising CAs would be able to apply the accounting standards instantly without any doubt. Further; students and members should refer annual reports of companies engaged in DIFFERENT LINE OF PRODUCTION OR SERVICES. FURTHER; At least one Government Company’s annual report, one of mutual funds company, one of non-banking finance company, one of insurance company and one annual report of a banking company’s must also be studied to widen approach to accounting on each and every sector. This will help them to understand practical application of accounting standards in different scenario. Even students and members living in remote areas can also take benefits to grasp the complexities of accounting standards in various industries.
SIXER ON LAST BALL: PUBLISHED ANNUAL REPORTS OF CORPORATE SECTOR are easily available with ANY STOCK BROKER and/or ANY PERSON ENGAGED IN STOCK MARKETS AND MUTUAL FUNDS. They “THROW” it because it is of NO USE for them; you should “CATCH” it for your MAXIMUM BENEFIT.
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