Apply Accounting Standards Uniformly- FM tells CAs

By Vijay Kumar

ADDRESSING the 42^nd Annual Conference of Southern India Regional Council of the Institute of Chartered Accountants of India (ICAI) at Kochi, Finance Minister Pranab Mukherjee asked Chartered Accountants to apply Accounting Standards uniformly and assist in presenting the true picture of the financial health of the company while ensuring accountability in all aspects. He said that standardizing of the accounting practices help in mitigating the problem of information asymmetry between various stake holders such as managers, owners and creditors. He said, while managers have the incentive to be more forthcoming on good news about the company's performance and prospects, they may want to hold back bad news. But the accountants as information intermediaries between managers and shareholders need to identify and recognise losses at an early stage, thereby mitigating asymmetry in information.