Accounting standards notified by central government

Co Act 2013 356 views 2 replies

Anil

1638 Points Joined October 2007

It is not clear to me as to why central government had to notify certain Accounting Standards to be followed by auditor while doing audit of companies.

A practicing Chartered Accountant would have any way followed the Accounting Standard issued by ICAI while doing Audit because a practicing member of ICAI is mandatorily required to follow AS issued by ICAI while doing Audit.

Kindly someone give a detailed explanation for this.

Thank you

Replies (2)

Gopal Chandu

Freelancer with intelligence agencies

113 Points Joined September 2018

Central Government get's it's own ideas.

Shubham Chaurasia

52 Points Joined December 2017

Hi Anil,
Here I am telling you why auditor is required to comply with AS issued by ICAI.
Actually as per Sec 133 of Companies Act, 2013 Companies are required to prepare the financials as per AS prescribed by CG but CG has not yet prescribed its own standards for accounting, so by notification, CG directed to comply with AS issued by ICAI to ultimately comply with provisions of companies act, 2013.
and for auditor, SA 200 says to conduct audit as per applicable FRF. FRF not specifically defined anywhere but it consists to comply with applicable provisions of Companies Act 2013. so in resulting, auditor is ultimately required to comply with AS issued by ICAI.