Financial Daily from THE HINDU group of publications
Tuesday, May 09, 2006
Financial Daily from THE HINDU group of publications Tuesday, May 09, 2006 |
|
|
|
|
|
|
|
Corporate
-
Accounting Standards First set of standards on internal audit gets ICAI nod K.R. Srivats
New Delhi , May 7 Audit firms undertaking internal audit assignments in companies and other forms of organisations will now be required to follow a set of best practices evolved by the Institute of Chartered Accountants of India (ICAI). The Central Council of ICAI had in its recent meeting given approval to a standard by the title `planning an internal audit.' This is the first of the several standards on internal audit that are to be issued in the current fiscal, the ICAI President, Mr T.N. Manoharan, told Business Line. After formulating accounting and auditing standards over the last three decades, ICAI has now set its eyes on non-exclusive areas of practice and has decided to come up with standards (best practices) in areas such as internal audits. "Managements and society will get comfort that if a chartered accountant were to be engaged for internal audit, there will be quality in the work that they perform. "Our standards on internal audit would be binding on the practising members. "The implementation aspects for members in industry are still being discussed and we are yet to take a decision," said Mr Manoharan. Meanwhile, ICAI has deferred by a year the applicability of an earlier announcement that spelt out the accounting treatment on the exchange differences arising on forward exchange contracts entered into to hedge the foreign currency risk of a firm commitment or a highly probable forecast transaction. As different enterprises were accounting for exchange differences arising on such contracts in different ways and since this was affecting comparability of financial statements, ICAI had specified that exchange differences on such contracts should be recognised in the profit and loss statement in the reporting period in which the exchange rate changes. Any profit or loss arising on renewal or cancellation of such contracts should be recognised as income or expense for the period, ICAI had said. While this accounting treatment was to come into effect from the accounting period beginning April 1, 2006, ICAI has decided that this would be effective from the accounting period beginning April 1, 2007. "We are deferring it by a year on the request of industry," Mr Manoharan said.
More Stories on : Accounting Standards | Auditing
Article E-Mail :: Comment :: Syndication :: Printer Friendly Page
|
Stories in this Section |
|
The Hindu Group: Home | About Us | Copyright | Archives | Contacts | Subscription Group Sites: The Hindu | Business Line | Sportstar | Frontline | The Hindu eBooks | The Hindu Images | Home |
Copyright © 2006, The
Hindu Business Line. Republication or redissemination of the contents of
this screen are expressly prohibited without the written consent of
The Hindu Business Line
|