FM urges independence of CAs to preserve integrity of financial statements

Says statutory filings and audit reports by CAs are public documents that multiple stakeholders rely on; urges adherence to fair and transparent practices

The independence of chartered accountants is of paramount importance to establish integrity of financial statements as they are not only responsible towards the shareholders but also towards financial institutions, government, and retail investors. This is because their statutory filings and audit reports are public documents that all these stakeholders rely on, Finance Minister Nirmala Sitharaman said on Friday.

“Accountants must ensure adherence to fair and transparent practices,” Sitharaman said at the World Congress of Accountants. “The accounting profession, if ethical and diligent, can benefit multiple stakeholders”, she said.

The finance minister said the world is in a state of flux because there are so many challenges that have not been seen before. Therefore, multinational organisations such as the United Nations or multinational development banks are looking at resetting themselves for a 21st century world.

Speaking on sustainability, the minister said, "We have to look at changing our lifestyle if we were to create a sustainable environment. Sustainability is laid on three pillars – social, environment, and economic factors. This translates to people, planet, and profits. Therefore, building on these principles, developing sustainability reporting standards objectives is very important." 

“In that the formation of a new international sustainability standards board by the International Financial Reporting Standards (IFRS) foundation towards convergence to a single set of reporting standards is a very welcome step,” the finance minister said.

Commenting on the importance of technology for accounting purposes, Sitharaman said, "We have to look at technology and adaptation of technology, web3 is overtaking our lives. I think the manner in which financial information is gathered and processed and also reported is going to make a difference."