Skip to content

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

Which statement about the Central Government's power to prescribe accounting standards under the Companies Act, 2013 is correct as per the official text of section 133?

Section 133 allows the Central Government to prescribe accounting standards as recommended by the ICAI, in consultation with and after examining the recommendations of the National Financial Reporting Authority. Companies, ICAI alone or SEBI do not hold this prescribing power under the section.

  1. AThe Central Government may prescribe standards of accounting as recommended by the ICAI, after consultation with and examination of the recommendations of the National Financial Reporting AuthorityCorrect
  2. BCompanies may freely prescribe their own accounting standards without any recommendation
  3. CThe ICAI itself notifies binding standards without involvement of the Central Government
  4. DThe Securities and Exchange Board of India prescribes standards under this section

Explanation

Section 133 empowers the Central Government to prescribe accounting standards or addenda as recommended by the ICAI, in consultation with and after examination of the recommendations of the NFRA. The other options attribute the power to companies, the ICAI alone or SEBI, which the section does not say.

Did you get it right without looking?

One question tells you little. A timed set on Introduction to Corporate Accounting shows your real accuracy, how long you take and where you lose marks.

Practise Introduction to Corporate AccountingFree diagnostic mock

More Introduction to Corporate Accounting questions