Page 270 - DCOM509_ADVANCED_AUDITING

Unit 14: Professional Ethics and Current Issues

In all 29 Accounting Standards have been prescribed. However their applicability is Notes
dependent on its size – Level I/II/III Company. The following text lists out the Accounting
Standards and its applicability.
Level I Company: Enterprises, which fall in any one or more of the following categories, at any
time during the accounting period, are classified as Level I enterprises:

1. Enterprises whose equity or debt securities are listed whether in India or outside India.
2. Enterprises, which are in the process of listing their equity or debt securities as evidenced
by the board of directors’ resolution in this regard.

3. Banks including co-operative banks.
4. Financial Institutions.
5. Enterprises carrying on insurance business.
6. All commercial, industrial and business reporting enterprises, whose turnover for the
immediately preceding accounting period on the basis of audited financial statements
exceeds 500 million. Turnover does not include ‘other income’.

7. All commercial, industrial and business reporting enterprises having borrowings,
including public deposits, in excess of 100 million at any time during the accounting
period.
8. Holding and subsidiary enterprises of any one of the above at any time during the accounting
period.

Level II Company: Enterprises, which are, not Level I enterprises but fall in any one or more of
the following categories are classified as Level II enterprises:
1. All commercial, industrial and business reporting enterprises, whose turnover for the
immediately preceding accounting period on the basis of audited financial statements
exceeds 4 million, but does not exceed 500 million. Turnover does not include ‘other
income’.
2. All commercial, industrial and business reporting enterprises having borrowing, including
public deposits, in excess of 10 million but not in excess of 100 million at any time
during the accounting period.
3. Holding and subsidiary enterprises of any one of the above at any time during the accounting
period.
Level III Company: Enterprises, which are not covered under Level I and Level II are considered
as Level III enterprises.

Self Assessment

Fill in the blanks:
4. ....................................... does not include personal misconduct by those charged with
governance, management or employees of the entity.

5. The mission of .............................is to serve the public interest, strengthen the worldwide
accountancy profession and contribute to the development of strong international
economies.
6. .................................... does not apply to other assurance engagements in which the auditor
is specifically engaged to test and report separately on compliance with specific laws or
regulations.

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