Voluntarily following AS 21,23,27
This query is : Resolved
24 February 2009
Company voluntariliy follwoing AS 21 , 23 & 27 and preparing consolidated financial statements even if its not mandatory for this company. Whether auditor can sign such consolidated financial statements and whther company can submit same for ROC and other statutory purposes?
24 February 2009
Yes
24 February 2009
thanks deepak. but can u tell where i can verify the same
24 February 2009
Whether in companies act or any other act its telling that we can do so
03 August 2025
Great question! Here’s a detailed response on **voluntarily following Accounting Standards (AS) 21, 23, and 27 and preparing consolidated financial statements (CFS) even if not mandatory**, and whether an auditor can sign and company can submit those CFS to ROC and others:
---
### 1. **Can a company voluntarily prepare Consolidated Financial Statements (CFS) following AS 21, 23, and 27?**
* **Yes, a company can voluntarily prepare consolidated financial statements** in accordance with Accounting Standards (AS) 21 (Consolidated Financial Statements), AS 23 (Accounting for Investments in Associates), and AS 27 (Financial Reporting of Interests in Joint Ventures), even if not **statutorily required**.
* Accounting Standards issued by ICAI are **recommendatory for non-mandatory companies**, but **mandatory for companies where applicable by law**.
---
### 2. **Can the auditor sign the voluntarily prepared Consolidated Financial Statements?**
* **Yes**, the auditor can sign such consolidated financial statements **provided**:
* The CFS are prepared as per AS 21, 23, 27 in a true and fair manner.
* The auditor has conducted audit procedures covering the parent and subsidiaries / associates / joint ventures as applicable.
* The auditor includes a clear statement in the audit report that these are voluntarily prepared CFS (if not mandatory).
---
### 3. **Can the company submit such CFS to ROC and other statutory authorities?**
* **There is no prohibition** in the Companies Act, 2013 or earlier Companies Act, 1956 against submitting voluntarily prepared consolidated financial statements.
* However, **filing with ROC is usually required only for standalone financial statements** unless specific directions apply.
* The company may **submit the voluntarily prepared CFS to shareholders, lenders, or regulatory authorities as per their requirements**.
---
### 4. **Where can you verify this?**
* **Companies Act, 2013 / Companies Act, 1956**: Does not prohibit preparation or signing of voluntary consolidated financial statements.
* **Accounting Standards issued by ICAI**: AS 21, 23, 27 (pronouncements on consolidated financial reporting).
* **Auditing and Assurance Standards (SAs)**: Guidance on auditor’s report for consolidated financial statements.
* **Institute of Chartered Accountants of India (ICAI) Guidance Notes** and FAQs.
---
### **Summary:**
| Question | Answer | Reference / Notes |
| ------------------------------------- | ----------------------------------- | ----------------------------------------------- |
| Voluntary preparation of CFS allowed? | Yes | ICAI AS 21, 23, 27; no statutory prohibition |
| Auditor can sign voluntary CFS? | Yes, if audit done as per standards | ICAI Auditing Standards; auditor's report notes |
| Submit voluntary CFS to ROC? | Not mandatory, but no prohibition | Companies Act provisions; regulatory discretion |
---
If you want, I can help provide relevant excerpts or references from the Companies Act, ICAI pronouncements, or sample auditor’s reports for voluntary consolidated financial statements. Would that be helpful?
---
### 1. **Can a company voluntarily prepare Consolidated Financial Statements (CFS) following AS 21, 23, and 27?**
* **Yes, a company can voluntarily prepare consolidated financial statements** in accordance with Accounting Standards (AS) 21 (Consolidated Financial Statements), AS 23 (Accounting for Investments in Associates), and AS 27 (Financial Reporting of Interests in Joint Ventures), even if not **statutorily required**.
* Accounting Standards issued by ICAI are **recommendatory for non-mandatory companies**, but **mandatory for companies where applicable by law**.
---
### 2. **Can the auditor sign the voluntarily prepared Consolidated Financial Statements?**
* **Yes**, the auditor can sign such consolidated financial statements **provided**:
* The CFS are prepared as per AS 21, 23, 27 in a true and fair manner.
* The auditor has conducted audit procedures covering the parent and subsidiaries / associates / joint ventures as applicable.
* The auditor includes a clear statement in the audit report that these are voluntarily prepared CFS (if not mandatory).
---
### 3. **Can the company submit such CFS to ROC and other statutory authorities?**
* **There is no prohibition** in the Companies Act, 2013 or earlier Companies Act, 1956 against submitting voluntarily prepared consolidated financial statements.
* However, **filing with ROC is usually required only for standalone financial statements** unless specific directions apply.
* The company may **submit the voluntarily prepared CFS to shareholders, lenders, or regulatory authorities as per their requirements**.
---
### 4. **Where can you verify this?**
* **Companies Act, 2013 / Companies Act, 1956**: Does not prohibit preparation or signing of voluntary consolidated financial statements.
* **Accounting Standards issued by ICAI**: AS 21, 23, 27 (pronouncements on consolidated financial reporting).
* **Auditing and Assurance Standards (SAs)**: Guidance on auditor’s report for consolidated financial statements.
* **Institute of Chartered Accountants of India (ICAI) Guidance Notes** and FAQs.
---
### **Summary:**
| Question | Answer | Reference / Notes |
| ------------------------------------- | ----------------------------------- | ----------------------------------------------- |
| Voluntary preparation of CFS allowed? | Yes | ICAI AS 21, 23, 27; no statutory prohibition |
| Auditor can sign voluntary CFS? | Yes, if audit done as per standards | ICAI Auditing Standards; auditor's report notes |
| Submit voluntary CFS to ROC? | Not mandatory, but no prohibition | Companies Act provisions; regulatory discretion |
---
If you want, I can help provide relevant excerpts or references from the Companies Act, ICAI pronouncements, or sample auditor’s reports for voluntary consolidated financial statements. Would that be helpful?
You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now
Click here to login now
Similar Resolved Queries
Unanswered Queries
- Section 270A penalty
- GST Registration Application -Rejected
- GSTR 9C- Table 9
- International transfer pricing- -> father entity vs son entity ->WHERE NO mutual say in management
- Tax liability on gift amount given to blood relation
- Gst registration rule 14A
- Query on solved queries
- Reimbursement of expense- GST applicable or not
- When was the effective CA partnership deed? Can I use old FRN until new FRN alloted by ICAI?
- Form 104 stamp paper deed
- PLACE OF SUPPLY FOR COMMISSION AGENT
- Transport service POS
- E INVOICE, E-WAY, INVOICE
- GST RATE ON CONSTRUCTION BRICKS ?
- To Whom the Invoice should be Raise to
- E stamp paper purchase
- Problem in filing Returns for International workers in EPFO
- Clarification for reversal of IGST on transfer of duty-free imported goods from EOU to DTA unit
- EXCESS CREDIT REALTED GST REVERSAL
- Export invoice not reported
Trending Online Classes
-
Live Course on GSTR 9 & 9C for FY 24-25(Detailed discussions, FAQ, Case studies and Live demo of GSTR 9/9C on GST Portal)
Industry Expert16 November 2025
CAclubindia
