Govt. to change role of accounting standards body

The Government plans to redefine the functions of
the National Advisory Committee on Accounting Standards (NACAS) to convert it
into an independent regulatory entity to monitor the quality of audit undertaken
across the corporate sector in the country.

The proposal, made by the Corporate Affairs
Ministry to the Parliamentary Committee on Finance that looked into the
Companies Bill, 2009, says the revamped NACAS should be allowed to oversee and
monitor the performance of standard-setting bodies for the accountancy and audit
professions.

Autonomous institutions such as the Institute of
Chartered Accountants of India (ICAI) and the Institute of Company Secretaries
of India, under the administrative control of the Corporate Affairs Ministry,
are the standard-setting bodies for accountancy and audit professions.

The Ministry response came after the Parliamentary
Committee, which submitted its report last week, expressed concerns over the
global economic crisis and the failure of big companies and suggested the
formation of an independent regulator to recommend standards for corporate
financial reporting, corporate audit and the quality of service of professionals
associated with ensuring compliance with such standards. It also wanted this
body to oversee, monitor and supervise the bodies involved in setting such
standards.

(Source : Internet www.taxguru.in, dated
10-9-2010)