Exposing financial shenanigans: The role of Indian accounting standards (Ind AS) in enhancing corporate accountability and governance

Abstract

The Indian Accounting Standards (Ind AS) play a pivotal role in reducing financial impropriety. These standards significantly enhance the accountability, accuracy, and transparency of financial reporting, thereby serving an essential function in deterring financial malfeasance. Such malfeasance includes deceptive accounting practices, misleading reporting, and the distortion of earnings, all of which undermine investor confidence, disrupt market integrity, and adversely affect the economy. The Ind AS, aligned with the International Financial Reporting Standards (IFRS), provide a comprehensive and robust framework that substantially improves the quality of financial reporting. The article outlines the significant benefits of Ind AS for financial reporting, such as increased transparency and accuracy. It presents case studies illustrating how the application of the standard has effectively addressed and mitigated financial discrepancies. Furthermore, the article examines the challenges organisations face in adopting Ind AS, including the complexities of transitioning from previous accounting standards and the need for extensive system reforms and personnel training. By elucidating these challenges, the article offers a thorough analysis of the effectiveness of Ind AS in addressing financial malpractice. It emphasises its role in fostering a more transparent and responsible financial reporting environment.