Impact of International Accounting Standards in Private Sector

Abstract

IFRS have been adopted by the European countries, but this change yet to be introduced in India. However, ICAI, Ministry of Corporate Affairs (MCA) and other regulatory bodies are continuously taking corrective action for the convergence of IGAAP with IFRS as the plan of implementation of IFRS from April 2013 did not go as expected. It infers from this study that the dream of convergence with IFRS from April 2013 has not come true for want of a well planned change process. After reviewing the various studies in this area, analyzing the effect of IFRS on financial statements of selected companies and ascertaining of Chartered Accountants’ views about convergence, we propose a model for proper implementation of IFRS in India. The model consists of three major phases: educating the stakeholders, implementation of IFRS and controlling for feedback and corrections.It is the primary responsibility of the management to maintain strong internal control to safeguard the recording of all financial operations of the business. The ostensible objective of these accounting standards is to promote the dissemination of timely and useful financial information to investors and certain other parties having an interest in the company’s economic performance. The accounting standards reduce the accounting alternative in the preparation of financial statements within the bounds of rationality, thereby ensuring comparability of financial statements of different enterprises.