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On Monday, Corporate Affairs Secretary Manoj Govil announced that the Centre is developing accounting standards specifically for the banking and insurance sectors. Speaking at an event marking the 75th foundation day of the Institute of Chartered Accountants of India (ICAI) in New Delhi, Govil highlighted the collaboration between the Centre and ICAI to elevate accounting and auditing firms in India to global prominence.
New Accounting Standards:
Govil revealed that efforts are underway to introduce new accounting standards, particularly for the insurance sector, as the existing International Financial Reporting Standards (IFRS) are currently applicable only to large companies and not the insurance industry. He confirmed the completion of research on this matter and the imminent formulation of standards for the insurance sector.
Banking Industry and Limited Liability Partnerships (LLPs):
Discussions with the Reserve Bank of India are ongoing to establish accounting standards for the banking industry. Additionally, the ministry is actively considering accounting standards for Limited Liability Partnerships (LLPs) based on recommendations from ICAI and the National Financial Reporting Authority (NFRA).
Regulatory Reviews and Timelines:
The ministry is undertaking a comprehensive review of regulations under the companies and LLP laws, aiming to streamline the voluntary closure process for companies. Govil noted a significant reduction in the average time for voluntary closures, from around two years to three months.
Global Leadership and Professional Education:
Addressing the aspiration for Indian accounting and auditing firms to achieve global leadership, Govil emphasized the collaborative efforts of the Ministry of Corporate Affairs (MCA) and ICAI to create an environment conducive to the emergence of Indian firms as global leaders. Furthermore, ICAI President Ranjeet Kumar Agarwal outlined plans to prepare a strategy for the aggregation of CA firms in the coming months, with a focus on providing continuous professional education to maintain global standards.Overall, there is a concerted effort to enhance the standing of accounting and auditing firms in India, with specific attention given to the banking and insurance sectors, as well as the broader goal of positioning Indian firms as global leaders in the field.