Top financial professionals of India Inc are keen on converging to global accounting norms and want the present ones to be aligned with either the International Financial Reporting Standards or the US GAAP.While 64 per cent of the surveyed Chief Financial Officers favoured alignment with IFRS another 31 per cent favoured US Generally Acceptable Accounting Principle (GAAP), according to a survey conducted by global consultancy firm Ernst & Young.
"Movement towards convergence with IFRS is now desirable. Adoption of IFRS will increase transparency and make financial statements more comparable," R K Agrawal, director, Ernst & Young India said.
However, majority of the CFOs agreed that the Indian GAAP is sufficient, relevant and clear even in comparison to global standards. Seventy nine per cent of the respondents believed that Indian GAAP met the needs of management to provide robust financial reports and 76 per cent believed that it meets the needs of stakeholders to obtain financial information as well.
On the need for a standard setter there was consensus among the CFOs that Institute of Chartered Accountants of India should be the sole standard setter agency. Even for setting forth their disclosure requirements 70 per cent of CFOs wanted ICAI to replace Schedule VI as the guiding force.
The CFOs also recommended some structural changes in Indian Generally Accepted Accounting Principles in the area of financial instruments and business combinations.
About 42 per cent of the respondents "strongly recommended" industry specific accounting standards for sectors like banking, real estate and telecom.
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