In this blog, we will discuss about accounting standards board of India. Also, you will learn about the issuing procedure of accounting standards in India and objectives of accounting standards. If you want to gain more knowledge about it, follow the article till to the end.
An accounting standard is a collection of procedures and guidelines used to standardize bookkeeping and other accounting operations over time and across different businesses. All aspects of an entity’s financial picture, including its assets, liabilities, income, outlays, and shareholders’ equity, are subject to accounting standards.
Accounting Standards Board of India
Accounting Standards Board of India, was established by The Institute of Chartered Accountants of India (ICAI), in April 1977. The Board was constituted to bring about uniformity in Indian accounting procedures- Accounting Standards Board is primarily responsible for ensuring that its formulated standards are established by the Council of Institute of Chartered Accountants of India.
Procedure for Issuing Accounting Standards in India
Step 1: Identify the wide areas which require the formulation of accounting standards and their relative priority.
Step 2: Communicate and collaborate with Government, Industry, Public Sector undertakings and other organisations to have their perspectives.
Step 3: Create study groups then prepare preliminary drafts (through conversations with various authorities and professional bodies). Then put forward the draft for opinion to the council of the institute and general public.
Step 4: Finalise the draft after proper deliberations.
Step 5: Submit the final draft to the Council of the Institute of Chartered Accountants for approval.
The Council of ICAI goes through the final draft and may suggest changes. After proper deliberations, the standards may be issued under the direction of the Council.
Accounting Standards Board Objectives and Functions in India
1) To identify and propose areas which require Accounting Standards to grow.
2) Formulation of Accounting Standards boards to aid the Council of ICAI in the formation of Accounting Standards in India.
3) To study International Accounting Standards as well as Reporting Standards to determine their applicability in Indian scenario.
4) Review Accounting Standards to keep them relevant to changed scenarios.
5) Offer interpretation and guidance on Accounting Standards.
6) Workout other related functions to Accounting Standards.