In India, the corporate culture and compliance level often do not inspire adequate confidence and comfort to shareholders, creditors, capital market and revenue authorities. They do not get the correct information about the actual financial status and solvency. Companies are required to provide the audited financial statements which give the true and fair view of their state of affairs and profitability to their shareholders. These statements are based on the facts and accounting standards of ICAI. The major problem in India is the multiplicity of regulatory agencies and insufficiency of their powers. What is needed now is the unification of corporate laws.

Financial reporting standards need a constant review to keep pace with the fastchanging economy. In India, financial reporting is in a stage of transitionwhere many changes are being introduced for convergence of international accounting standards. It is also recognized that having a framework of credible financial reporting standards in India compatible with international accepted norms, is one of the essential prerequisites for attracting foreign investment and for globalization of the economy.

Financial reporting in India was characterized by an acute absence of certain basic accounting pronouncements, including in the areas of consolidation of majority-owned subsidiaries, accounting for income taxes, joint ventures as well as impairment of assets. International standards that focused on disclosure issues were not mandated in India by the accounting and regulatory bodies until recently. These include standards relating to segment reporting, Earning Per Share (EPS) and discontinued operations.

The Kumar Mangalam Birla Committee's report (2000) on corporate governance stressed the need for accounting standards in the areas of consolidation, segment reporting, deferred tax accounting and related party transactions. A few standards become mandatory in a phased manner. India is now almost on par with the international accounting communities so far as accounting standards are concerned. The ICAI is also undertaking research in the areas of fair values and financial instruments.

Accounting World Magazine, Global Accounting Standard Norms, Financial Reporting Standards, International Accounting Standards, Generally Accepted Accounting Principles, GAAP, International Financial Reporting Standards, IFRS, Insurance Regulatory and Development Authority, IRDA, Government Accounting Standard Board, GASAB, Institute of Chartered Accountants of India, ICAI.