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

Under the Indian regulatory framework, which body is empowered to prescribe Accounting Standards for companies, on the recommendation of the National Financial Reporting Authority (NFRA)?

The Central Government prescribes Accounting Standards for companies in India, acting on recommendations from NFRA. Professional institutes such as ICAI only formulate standards and recommend them. The RBI regulates banking and the Registrar of Companies handles filings, so neither has the power to prescribe the standards.

  1. ACentral GovernmentCorrect
  2. BInstitute of Cost Accountants of India
  3. CReserve Bank of India
  4. DRegistrar of Companies

Explanation

Under the Companies Act, 2013, the Central Government prescribes Accounting Standards after considering NFRA's recommendations. ICAI-type bodies only formulate and recommend standards. The RBI regulates banks, and the Registrar of Companies handles registration and filings, so neither prescribes the standards.

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