The article written by the President of Bombay Chartered Accountants Society in the September 2008 issue was a thought provoking one. Was the world’s most respected, prestigious and trustworthy profession communicating in a form which was becoming increasingly complex? It is true that entire financial statements cannot be conveyed in a manner that can be understood by everyone. Every profession has its own hieroglyphics.
But why make it even more complex that it makes even the accountants see stars. One of the AS/IFRS experts remarked that 30 page financial statements will grow to 150-200 pages. Though this will contribute to financial transparency and better analysis (for capital market experts) a few other aspects also needed to be looked into:
Amount of compliance costs. India is one of the countries in the world having high compliance costs.
Small and medium companies also need to comply with these standards. Is it really necessary? (Currently relaxations available under Indian AS are not very encouraging) Apart from compliance, educating them could eat into the time of audit firms.
Since IFRS is more rule based and complex, audit will become a compliance ritual a last thing this esteemed profession warrants.
Though globally accepted standards might be the need of the hour for a rapidly developing economy like ours, convergence is the only feasible option than copying verbatim.
ICAI terms it as “Convergence with IFRS” but issuance of last few standards stands as testimony to the contrary.
No comments:
Post a Comment