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CMA Foundation · Fundamentals of Financial and Cost Accounting · Four Frameworks of Accounting and Forms of Organization

In India, Accounting Standards (AS) notified under the Companies Act are issued by which of the following routes?

Accounting Standards for companies in India are formulated by ICAI, recommended by the National Financial Reporting Authority and then notified by the Central Government under the Companies Act. The RBI, Registrar of Companies and ICMAI do not issue them.

  1. AIssued by ICAI and notified by the Central Government on the recommendation of the National Financial Reporting AuthorityCorrect
  2. BIssued directly by the Reserve Bank of India for all companies
  3. CIssued by the Registrar of Companies for each financial year
  4. DIssued by the Institute of Cost Accountants of India for cost records only

Explanation

ICAI formulates the standards, NFRA recommends them, and the Central Government notifies them under the Companies Act. RBI, the Registrar of Companies and ICMAI do not issue the general accounting standards for companies, so the other options are wrong.

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