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CS Executive · Corporate Accounting and Financial Management · Introduction to Corporate Accounting

Under the Companies Act, 2013, who prescribes the accounting standards that companies must follow?

Section 133 of the Companies Act, 2013 lets the Central Government prescribe accounting standards. It acts on the recommendation of the ICAI, in consultation with and after examining the recommendations of the National Financial Reporting Authority. SEBI, the Registrar of Companies and the CAG do not prescribe them.

  1. AThe Central Government, on the recommendation of the ICAI, after consulting the National Financial Reporting AuthorityCorrect
  2. BThe Securities and Exchange Board of India, on the recommendation of the stock exchanges
  3. CThe Registrar of Companies, after approval of the shareholders
  4. DThe Ministry of Finance, on the recommendation of the Comptroller and Auditor General

Explanation

Section 133 empowers the Central Government to prescribe accounting standards as recommended by the ICAI, in consultation with and after examination of the recommendations of the National Financial Reporting Authority. SEBI, the ROC and the CAG have no such role under this section.

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