The Issues Of The Companies Act - 2134 Words

The Companies Act, 1956 lays down the detailed provisions with respect to the preparation and maintenance of books of accounts and of annual accounts and also the publication of the same in the prescribed manner. It specifies the roles, responsibilities, duties and liabilities of directors and also the matters to be reported upon by them in the annual reports of the companies disclosing the required information. Under the provisions of the Act, it is compulsory for all companies registered under it to prepare the annual accounts and get them audited by an independent auditor. The Act extensively deals with the qualification, appointment, removal, rights, duties and liabilities of auditors and provides contents of auditors’ report. In case†¦show more content†¦2.1.1 Disclosure of Financial statements Section 128 of the Companies Act, 2013 deals with the books of account and mandated that every company shall prepare and keep at its registered office books of accounts and other relevant documents and financial statements for every financial year which give the true and fair view of the state of the affairs of the company. The section also makes it mandatory for the companies to keep the books of accounts of the branch offices at the place of registered office. Such book keeping has to be done in accordance with the accounting standards and in consonance with the accounting principles which have been given statutory recognition. Up to 1997 there was no statutory backing of accounting standards in India and there was only professional requirement by the ICAI, the standard-setting body in India for ensuring compliance of accounting standards through audit function by its members. However, in the absence any statutory requirement of the observance of accounting standards on the managem ent of companies, compliance with accounting standards was left to discretion of the management. In 1998 the Companies (Amendment) Ordinance, 1998 was promulgated by the President of India. This Ordinance gave statutory recognition to accounting standards and required the auditor to report on the compliance with accounting standards. The ordinance also provided for the constitution of