“accounting standards"

Explain the provisions of the Companies Act, 1956 as regards keeping the books of
account. Who are responsible for this? What are the legal provisions for default in this respect.
(a) Books of Acc,ounts Required to be Kept
(b) Persons Responsible for Keeping Books of Account
The following persons shall be held responsible for the failure to take all reasonable steps to keep proper books of account, or if they have been the cause of any default by the company in this regard by their own wilful act, namely,
(i) where the company has a Managing Director or Manager, such Managing
Director or Manager
(ii) where the company has neither a Managing Director nor Manager, every
Director of the company
(iii) every officer and other employee and agent, as defined in Section 240(6) of the
Act excluding Bankers, Auditors and Legal Advisers of the company [Section
209(6)].
Sub-section (7) of Section 209 empowers a Managing Director, Manager or Board of Directors to make any person other than the persons referred to above responsible to ensure that the requirements of this Section are complied with.
Penalty. In case of default, any of the persons as aforesaid shall be punishable with imprisonment for a term which may extend to six months, or with fine upto Rs. 10,000 or both.
It is further provided that no such person shall be sentenced to imprisonment for such offence unless it was committed wilfully.
Defence Available. In any proceedings for failure to comply with the requirements of Section 209 of the Act by persons under this Section, it is open to the persons who are responsible for such compliance to prove that a competent and reliable person was charged with the duty of seeing that the requirements as to the maintenance of proper books of accounts were complied with and that such a person was in a position to discharge that duty [Sec. 209(5)].
Q. 3. State the law relating to the preparation and presentation of balance sheet and profit and loss account of a company.. Section 211 alongwith Schedule VI ‘Of the Companies Act deals with the preparation and presentation of balance sheet and profit and loss account of a company. This Section requires that every balance sheet of a company shall give a true and fair view of the state of affairs of the company as at the end of the financial year. The balance sheet should be in the form set out in Part I of Schedule VI, or as near thereto as circumstances permit, or in such other form as approved by the Central Government.
Schedule VI, Part I prescribes two forms in which balance sheet should be prepared, one horizontal and other vertical. It must contain all the information as specified in Schedule VI. In preparing the balance sheet, as far as possible, the general instructions given in ‘notes’ at the end of the part may be followed.
Schedule VI does not prescribe any form in which profit and loss account should be prepared. However, the profit and loss account should give a true and fair view of the profit and loss of the company for the financial year and should comply with the requirements of Part IT of Schedule VI so far as they are applicable.
It may be noted that the Companies (Amendment) Act, 1999 has amended Section 211 by including sub-sections (3A), (3B) and (3C). Sub-section (3A) provides that every profit and loss account and the balance sheet of the company shall comply with the accounting standards.
Where the profit and loss account and the balance sheet of the company do not comply with the accounting standards, such companies shall disclose in its profit and loss account and balance sheet, the following namely:
(a) the deviation from the accounting standards;
(b) the reasons for such deviation; and
© the financial effect, if any, arising due to such deviation [sub-section (3B)].
For the purposes of Section 211, the expression “accounting standards"