The Institute of Chartered Accountants of India (ICAI) is planning to introduce sector-specific accounting standards to bring in more transparency in handling corporate accounts. ICAI Committee for Members in the Industry (CMII) has already formed three groups in sectors such as insurance, retail and hospitality and is in the process of forming another 19 groups representing various industrial segments to recommend such additional standards.
The major sectors where ICAI intends to focus now are banking, BPO, construction, education, fertilisers, petrochemicals, power, shipping, telecommunications, tourism and oil and gas exploration.Online GST Certification Course by TaxGuru & MSME- Click here to Join
Currently, all audits are carried out according to the general 32 accounting standards prescribed by the institution. The new move is expected to result in more mandatory disclosures from the companies.
“We are thinking of more standards. We have 32 standards on the basis we do the auditing. We want more disclosures and transparency, resulting in more information to the stakeholder. Today, some standards, for instance the number of settlement claims to be recorded by the insurance player, may not be applicable for others. So, we have industry-specific groups that are looking into the possibilities of suggesting new norms to ensure more disclosure,” ICAI President Uttam Prakash Agarwal told Business Standard.
The groups will be asked to study all accounting and auditing issues related to the specific sectors. The groups will also look into the impact of various central government initiatives and make practical suggestions on each of these.
“There are lots of Bills coming up for legislation. These include direct tax code, GST, LLP, IFRS, Companies Bill, among others. The groups will give their views on each of these Bills and its impact on specific sectors of the industry,” Agarwal said.
ICAI expects the recommendations of the groups to be ready by early next year.