Press Information Bureau

Government of India

Ministry of Corporate Affairs

06-September-2012 17:08 IST

Violation of Accounting Principles

The Government is aware that violation of accounting principles and financial irregularities are being carried out by various companies and their audit firms. During the last three years, 316 companies and 73 audit firms were found guilty of violation of accounting principles and other financial irregularities for non-compliance of disclosure norms. Prosecutions have been filed against such companies and audit firms, under section 211 and section 227 read with section 233 respectively of the Companies Act, 1956 for such violations.

This information was given by Minister of State for Corporate Affairs Shri R.P.N. Singh in reply to a written question in the Lok Sabha today.

ST

Violation of accounting principles prompts prosecutions under Companies Act provisions against companies and audit firms for disclosure non-compliance. Violation of accounting principles and financial irregularities were found across numerous companies and audit firms over a three year period, reflecting non compliance with disclosure obligations. Criminal prosecutions have been initiated under the Companies Act against the implicated companies and audit firms to enforce corporate and audit accountability for deficient financial reporting and disclosure failures.