With India going global, corporate management is now feeling the pressure for reforming accounting practices and level of transparency arising from lenders, regulatory agencies, financial analyst and above all board of directors who realize that it is the quality of information which will determine how efficiently they have discharged their responsibilities towards the good Corporate Governance.

There is no doubt in that the IFRS results into better accounting quality. There is more detailed disclosure under IFRS as compared to what companies do under Indian GAAP.

Every organization will have to review there business policy & procedures, valuation models, agreements etc. Instead in many organization most of them are carry forward from year to year.

Currently management of companies in India is not serious for convergence to IFRS but rather consider it as a label and not as a commitment to provide investors with higher quality financial information.

A European study on IFRS shows high governance quality companies will be more willing to apply the standard early, even if they have no incentive to do, as opposed to companies with worse governance practices.

But good news is that the regulator, ICAI and other bodies in financial markets have stepped up to respond to investor demands for improved corporate governance, compliance, and transparency by making corporate converging to IFRS by April 2011.

Author name: CA Shalini Tibe

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