REGULATORY DEVELOPMENT IN FINANCIAL REPORTING AND EMERGING CHALLENGES

Abstract

A financial reporting system supported by strong governance, high quality standards, and firm regulatory framework is the key to economic development. Indeed, sound financial reporting standards underline the trust that investors place in financial reporting information and thus play an important role in contributing to the economic development of a country. The International Financial Reporting Standards (IFRSs) issued by the International Accounting Standards Board (IASB) are increasingly being recognized as Global Financial Reporting Standards. More than 100 countries such as countries of European Union, Australia, New Zealand, USA, Russia currently require or permit the use of IFRSs in their countries. In present scenario of globalization, The Institute of Chartered Accountants of India ([CAI), being a member of the International Federation of Accountants (IFAC), considers the IFRSs and tries to integrate them, to the extent possible, in the light of the laws, customs, practices and business environment prevailing in India. Presently, the Accounting Standards Board (ASB) of the ICAI formulates Accounting Standards (ASs) based on the IFRSs keeping in view the local conditions including legal and economic environment, which have recently been notified by the Central Government under the Companies Act, 1956.