Auditing in India in olden days

madugundurukmini By madugundurukmini, 7th Dec 2013 | Follow this author | RSS Feed
Posted in Wikinut>Business>Accounting & Finance

The first company legislation in India contained regulations for the annual audit of company accounts.

The growth of the accounting profession in India is of a recent origin

The system of accounting and auditing is believed to have existed in our country under the Mauryas, Chandra Gupta and other Hindu Kings, Kautilya, in his Arthashastra had mentioned about the accounting and auditing of state finance. He stated that, `all undertakings depend on finance hence, foremost attention should be paid to the treasury'. He also listed various kinds of frauds and embezzlements and prescribed punishments to deal with them. However, the growth of the accounting profession in India is of a recent origin.`

A firm foundation has been laid down to build up the accounting and auditing profession in India.

The first company legislation in India contained regulations for the annual audit of company accounts. But adoption of these regulations were entirely optional as there was no legal obligation on the part of a company to have the audit of their annual accounts. It was the Companies Act 1913 which made it compulsory for every company incorporated under it to have its accounts audited by professional accounts. This Act for the first time prescribed the qualification of the auditor, model special mention of his powers and duties as well as laid down the procedure for his appointment.

Like this several changes have taken place in the profession of auditing the past four decades. Mandatory provisions have been incorporated in the Chartered Accountants Act, 1949, to regulate the auditors. Another remarkable change that has taken place is that of the establishment of another professional body called `The institute of cost and works Accountant' (ICWA) in 1959. this institute prepares Cost Accountants. Thus, a firm foundation has been laid down to build up the accounting and auditing profession in India.

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Comments

author avatar Fern Mc Costigan
8th Dec 2013 (#)

Interesting post as always Madu

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