‘Unless you act on audit reports, don’t blame the auditor’

The Institute of Chartered Accountants of India (ICAI),  with over 1,50,000 members and 6,00,000 students, is one of the largest accounting bodies in the world. Mandated to regulate the profession of chartered accountants (CAs), the ICAI has been in the news since the auditors of ill-famed Satyam Computers failed to detect the lengthy accounting fraud [...]

FAQ on AS 11 by MCA

Relaxations were given in Accounting Standard 11 (AS-11) on “The Effects of Changes in Foreign Exchange Rates” given to Corporates vide Companies (Accounting Standards) Amendment Rules, 2009 [G.S.R. 225 (E) dtd. 31-Mar-09] issued by Ministry of Corporate Affairs.
Herewith attached is the ASB Guidance in the form of FAQs to illustrate and to assist in clarifying [...]

Accounting norm changes help major companies boost earnings

Benefit of option to capitalise/amortise differences in forex rates.

Walking stick
Profits of Tata Motors, M&M and Sterlite Industries would have been lower but for the amendment
JSW Steel, Bharat Forge and Ashok Leyland may have slipped into losses in FY-09 if the new option had not been exercised

Relaxations in AS 11, the Accounting Standard that [...]

The right medicine?

The present crisis of confidence in the audit profession among users and stakeholders, arising from recent market events has to be addressed in a fair manner. The profession, regulators and all concerned have to determine – what is the right medicine?
A professional issue requires a professional response. Thus, the fundamental point is that the solution [...]

Scope of an audit is different from that of an investigation

Investigators, regulators and stakeholders of fraud-hit Satyam Computer Services attribute auditor’s failure in detecting the fraud to either negligence, incompetence or blatant connivance with the promoters who cooked books for years. Ideally, auditors, who accept hefty fee, should ensure that they independently verify all documents they rely on before certifying the financial statements of a [...]

ICAI proposal may hit audit firms here

Indian audit firms, that informally work as the audit arms of big foreign accounting firms, may soon have to sever their foreign affiliations, if accounting and auditing rule maker ICAI has its way.
In what could be a fall-out of the Satyam account fabrication episode, the Institute of Chartered Accountants of India (ICAI) has started [...]

Creative accounting helps cos cover up forex losses

Companies are getting creative in using the Company Act and Accounting Standards to avoid the impact of foreign currency loan on their profit & loss statement owing to currency fluctuations. Companies with foreign currency borrowings have now adopted various accounting tactics to ensure that their quarterly performance remains intact in the event of losses arising [...]

The impact of IFRS on corporate governance

Come 2011, and audit committees and board members of Indian companies will have to deal with convergence of Indian GAAP (generally accepted accounting principles) with International Financial Reporting Standards (IFRS), which will have a key impact on their functioning, roles and responsibilities. The audit committees and board members will have to handle this challenge in [...]

Non-Banking Financial Companies Auditor’s Report (Reserve Bank) Directions, 2008

The Reserve Bank of India had issued Directions to the auditors of Non-Banking Financial Companies under Section 45 MA of the RBI Act, 1934, vide Notification No. DFC. 117 /DG (SPT)-98 dated January 2, 1998.
The Directions have been consolidated and in supersession of said Directions viz. the Non-Banking Financial Companies Auditor’s Report (Reserve Bank) [...]

Reclassification of NBFCs

The Reserve Bank of India (RBI) has issued a Circular mandating all erstwhile EL/HP NBFCs should, duly supported by Statutory Auditors’ Certificate as on March 31, 2008, immediately approach the Regional Office concerned for appropriate classification latest by December 31, 2008 after which NBFCs which have not opted for the classification would be deemed to [...]