Section 133 of the Companies Act, 2013
Section 133 of the Companies Act, 2013 – Central Government to prescribe accounting standards
🔹 Key Provision:
Section 133 empowers the Central Government to prescribe Accounting Standards for companies in consultation with:
The National Financial Reporting Authority (NFRA), and
Based on recommendations of the Institute of Chartered Accountants of India (ICAI).
✅ What It Means:
The Central Government is the authority that notifies the Accounting Standards (AS or Ind AS) to be followed by companies.
These standards are mandatory for companies while preparing their financial statements.
Ensures uniformity, transparency, and comparability in the financial reporting of companies in India.
🧩 Key Participants:
| Authority | Role |
|---|---|
| Central Government | Prescribes the standards |
| NFRA | Recommends and enforces standards |
| ICAI | Suggests draft standards |
📘 Applicability:
Different accounting standards may be prescribed for different classes of companies, e.g., Ind AS for listed companies and large unlisted companies.
⚠️ Penalty for Non-Compliance:
Companies not complying with the prescribed standards may face penalties under other provisions (like Section 129, Section 134) relating to financial statements.
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