Non-compliance of Accounting Standards

[Kasturi Sastry]

Dear All,

 

Please let me know the consequences of non-compliance of Accounting Standards issued by ICAI.

--
Kasturi.S
Company Secretary
9901952524

------------------------------------------------------------------------
PROMAC ENGINEERING INDUSTRIES LIMITED,
Alahalli, Anjanapura post, Off Kanakapura Road,
Bangalore - 560 062.
Ph: 080-26330372.

[CS. Dattatri]

First and foremost - Statutory auditor will not certify your accounts.

 

Who will believe your accounts if it is not maintained as per the standards accepted by industry and the government?

 

Dattatri

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From: csmy...@googlegroups.com [mailto:csmy...@googlegroups.com] On Behalf Of Kasturi Sastry
Sent: Wednesday, 28 May, 2008 5:12 PM
To: csmy...@googlegroups.com
Subject: [CSMysore] Non-compliance of Accounting Standards

[Kasturi Sastry]

O.K.

 

If the non-compliance is un-intentional, how can the same be corrected?

 

Further, in AS-3, the standard says that if the enterprise does not present the cash flow statement as prescribed, the fact to that effect should be disclosed.  Is that the end of it?

 

Regards,
Kasturi S

[M Krishna]

Dear Kasturi,

Auditors are going to qualify your report, then you need to explain reasons this qualification in directors report.
As dattatri mentioned no statutory authorities will accept and you can expect some trouble from Income tax department during assessment.
I like to whether non-compliance is only in respect of a particular point in Accounting Standard or you don't want to comply with any of the Accounting Standards ?

Best Regards,

M Krishna
Financial Controller
AT&S India Pvt Ltd

12 A Industrial Area | Nanjangud 571301
Mysore District | Karnataka | India
Mobile +91 98805 30435
Phone  +91 8221 304 070
Fax       +91 8221 228 570

Email   m.kr...@in.ats.net
www.ats.net

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[Kasturi Sastry]

Dear Krishna,

 

I just wanted to know what would be the consequences if any particular clause of AS which deals with disclosure of financial data in Annual Report is not complied with.  Ex:  some information which should mandatorily be provided to shareholders is missing in Annual Report.  

 

Regards,

Kasturi S

[madhwesh acharya]

Dear kasturi,

 

 

Section 211(3A) of the companies act 1956 states that "Every profit and loss account and balance sheet of the company shall comply with the accounting standards."

Further, section 211(3B) gives a little exemption thtat "Where the profit and loss account and the balance sheet of the company do not comply with the accounting standards, such companies shall disclose in its profit and loss account and balance sheet, the following, namely :-

(a) the deviation from the accounting standards;

(b) the reasons for such deviation; and

(c) the financial effect, if any, arising due to such deviation.

Section 211(8) imposes a penalty of "imprisonment for a term which may extend to six months or with fine which may extend to ten thousand rupees, or with both" for non compliance of provisions of section 211.

 

The offence is compoundable u/s 621A

 

Regards,

Madhwesh Krishna Acharya,

Company Secretary,

Kurlon Limited,

Bangalore

9945399584