• PAGE ONE
• INDEX
• HOME

Case for easing SME disclosure norms

K.R. Srivats

NEW DELHI, Oct. 29

THE National Advisory Committee on Accounting Standards (NACAS) has assessed the orientation of the existing accounting standards issued by the Institute of Chartered Accountants of India (ICAI) in meeting the growth aspirations and needs of the small an d medium-scale enterprises (SMEs) in the country.

Even though there may not be any need to review the existing accounting policies, it was felt that there may be a case for relaxing the disclosure requirements for the SMEs. Issues such as cost of compliance and aspects relating to the attendant benefits of disclosures were discussed, a member of the committee told Business Line here.

However, no final decision emerged as to whether the disclosure requirements should be relaxed for the SME sector or not. The NACAS meeting was chaired by Mr Y.H. Malegam, Chartered Accountant.

The 12-member NACAS had its first-ever meeting on Saturday, nearly two months after the committee was formally constituted by the Union Government in late August this year.

The NACAS has been set up to advise the Government on the formulation and laying down of accounting policies and accounting standards for adoption by companies or class of companies under the Companies Act, 1956.

Sources said that the NACAS also deliberated upon the scope of its functioning and also on the sanctity of accounting standards issued by the ICAI in the wake of the establishment of this advisory committee.

The role of ICAI vis-a-vis the newly- constituted Advisory Committee recently become a point of debate among corporate executives and chartered accountants. Some of them claimed that the authority for prescribing the accounting standards for the purpose of preparation of financial statements of certain class of companies has moved from ICAI to the Union Government, which will now prescribe accounting standards in consultation with NACAS.