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NEW DELHI, Aug. 22

A GOVERNMENT Accounting Standards Advisory Board (GASAB) for the Union and States has been established by the Comptroller and Auditor General (C&AG) of India.

The main responsibility of GASAB is to formulate and propose standards that improve transparency and the usefulness of financial reports based on the needs of the financial report users and to keep updating them, Mr V.N. Kaul, CAG of India, said.

In his address at the national conference on `Corporate governance and accounting standards - Emerging role of CFOs, organised by the Federation of Indian Chamber of Commerce and Industry (FICCI) and the Institute of Chartered Accountants of India (ICAI), , Mr Kaul said it was obvious that cosmetic tinkering with the Companies Act, 1956, and an incremental approach to accounting standards would have little impact.

The Minister of State for Law and Justice, Mr Ravi Shankar Prasad, in his inaugural address, said there was need to give some autonomy to auditors, which would ensure better transparency in accounting.

On the role of CFOs, particularly in the wake of an open market, Mr Prasad said the Indian economy was now exposed to foreign investments and thus, to varied stakeholders. He further said in this regard, it had become imminent for enterprises to respond to stakeholders' aspirations through a norm that would be predictable, uniformly applied and transparent and that the CFO had to play a pivotal role to ensure all of these.

"ICAI is seized of the role that it has to play in ensuring the highest standards of probity in financial transactions and transparency in financial reporting," Mr Ashok Chandak, President of ICAI, said.

"Of late, certain comments have been made on the code of ethics for the Chartered Accountants and the disciplinary mechanism of the institute. However, these are misplaced and are far from facts," Mr Chandak said.

As a regulator and quasi-judicial authority, the institute could not act or pre-judge or penalise the professional negligence merely based on media reports, he said.

"The institute keeps a close watch on the events affecting the profession or attributed to the purported actions or inactions of its members within the realm of the legislative mandate it has. Actions are proactive, taken with judicial framework and not for creating publicity hype. These include the cases which have been reported and debated in the media and elsewhere in recent times," he said.

The disciplinary mechanism would be strengthened and more effective if the suggestions made by the institute to the Government were carried through by amendment in the Chartered Accountants Act, Mr Chandak said.

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