Along with a view to harmonise varying accounting policies and practices recently utilize in India, the Institute of Chartered Accountants of India (ICAI) created the Accounting Standards Board (ASB) in April, 1977 year that includes representatives from government and industry. In line with the process followed in the other countries, the preliminary drafts prepared through the study groups and approved through ASB are circulated amongst different external agencies, including the representative bodies of commerce, trade and industry. So far, twenty 28 standards have been certified through ASB, a brief explanation of that is provided in further this unit.
The standards are recommendatory in nature in the primary years. They are suggested for use through companies listed on a recognized stock exchange and another large commercial, business and industrial enterprises into the private and public sectors.
We advise you that read all or at least several of these standards so as to get a feel of what such standards are all regarding. What are the procedures and policies of accounting that such standards aim to standardize and why? Do not concern if you are incapable to understand several of the ideas or expressions contained in the standards. You may like to reply to these standards after you have been during all the blocks of this course, so as to have a better grasp of them.
Regarding the position in India, this has been stated that the standards have been growth without initially establishing the necessary theoretical framework. Without such a framework, this has been contended; any accounting standards and principles expanded are likely to lack direction and coherence. This kind of shortcoming also existed in the United Kingdome and USA, but after that it was recognized and remedied a long time ago. In the United States, the initial task that the FASB undertook was to expand a conceptual framework project that aimed at defining the objectives of financial reporting. It was to be followed through the spelling out of concepts and standards establishing what have been often referred to as generally accepted accounting principles (GAAP). Several attempts to develop a conceptual framework about the objectives of reporting will have to take into consideration the answers to the subsequent questions:
i) Who are the financial reports' users?
ii) What decisions do these user groups have to receive?
iii) What information can be given that would help them to take such decisions?
The objectives, as you have previously noted, based on the economic, legal, political and social environment of the country.