HYDERABAD: While reforms like the goods and services tax (GST) and aligning of Indian accounting practices and financial reporting with global standards may pay off in the long term, many companies, especially small and medium enterprises (SMEs) are finding these initiatives difficult to embrace.
“India has decided to align its accounting practices and financial reporting with International Financial Reporting Standards. Besides, changes in regulatory framework like introduction of MAT, GST, increasing regulations by Sebi in case of IPOs are putting pressure on firms in case of compliance,” Madhusudhan Kankani, partner (accounting advisory services) at KPMG India.He noted that these changes not only lead to a change in accounting and taxation practices but also impact the companies in a larger way, even affecting their finances and performance.
“Companies need to focus on upskilling their staff to enable them to successfully deal with changes in regulatory framework and prepare in advance to face changes. While most of the big firms with large teams and resources are able to deal with changes, SMEs are struggling with even compliance cost increasing,” added Kankani.
He pointed out that companies from infrastructure, realty, financial services, and consumer goods segments are the ones that are having the highest impact.