The Hindu Business Line : Healthy economy reflects sturdy accounting system: ICAI chief

WHEN the world of accounting turned topsy-turvy in the recent past, the Indian accountancy profession was not surprised at all. In fact, the rest of the world was perplexed why the Indian accounting profession was not surprised.

The reason for this was the sturdiness of the Indian accounting regime and ample proof for it is the current shape of the Indian economy and health of its industries, according to the President of the Institute of Chartered Accountants of India (ICAI), Mr R. Bupathy.

Addressing the inaugural session of the two-day international conference on `The Global Challenge to Accounting' here on Friday, the ICAI President said, "therefore, when talking of the global challenge to accounting, we are talking less about the challenge to Indian accounting, and more about the challenges that others will perhaps face when coming to India and adjusting to our regime as much as the challenges that Indian companies will face when they step out."

If that sounds like a conundrum, Mr Bupathy suggests the accounting professionals to consider the fact that "whichever country a multinational goes to, it carries its own accountants and auditors with it."

However, stating that Indian multinationals were no exception to it, he said what cannot be done in India may be permissible in other countries. "It is therefore important for Indian business to know that their strength comes from the robustness of their accounting and the rigour of auditing to which they are subject."

The ICAI President cautioned that any dilution or distortion of these accounting norms would ultimately lead to the dilution and distortion of shareholder wealth. "More so, when the sheer volume and complexity of international transactions tend to overtake considerations of probity and propriety," he said.

The ICAI Central Council Member, Mr Shantilal Daga, advised the Indian accounting professionals not to lose their Indian-ness in making themselves more adaptive to what has been happening in the rest of the world. According to him, the essential Indian-ness in so far as accounting and auditing were concerned lies in "our commitment to building accountability through strict adherence to the code of ethics that we practice under."

Stressing on the fiscal reforms, the Andhra Pradesh Finance Minister, Mr Y. Ramakrishnudu, said the State Government has decided to take a number of measures including completion of a State Financial Accountability Assessment and related action programme with an objective to undertake a comprehensive and accurate analysis of the strengths and weaknesses of the existing financial system and other control mechanisms of the State. The specific focus would be on accounting, auditing, financial reporting, management control, transparency and public access to information on Government finances and accounts, he said.

Further, the Minister said the State Government also introduced the system of audit by private auditors in the areas such as audit of local bodies, co-operative audits, sales tax and other areas. "It is the endeavour of the Government to have utmost transparency in all its transactions by utilising the services of chartered accountants wherever possible."

More Stories on : Accounting Standards | Economy

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page

Stories in this Section
Indian Acrylics plans to modernise plants

NEI bags order from US, Brazil

Healthy economy reflects sturdy accounting system: ICAI chief

Bharti may raise $500 m thru ECBs

Proposal to raise $100 m — Ashok Leyland paid-up equity may rise 15 pc

Special Court clears Jayalalithaa in SPIC case

Corporate debt restructuring okayed — GAIL may become equity partner in Haldia Petro

`IOC role still to be firmed up'

ADB picks up 5.2 pc stake in Petronet LNG

Revival scheme for ACRL merger with Guj Ambuja cleared

LMW bullish on growth prospects

Ford component makers get global quality certification

Rallis to focus on agrochemicals