New Delhi: Government is considering making consolidated accounts, which include accounts of subsidiaries, mandatory for all companies after the recent stock market scam and financial irregularities which eroded investor confidence.

A final decision on making consolidated accounts mandatory is likely after the Department of Company Affairs (DCA) examines the report submitted recently by the National Accounting Standards Advisory Committee.

"Our recent experiences, specially in the stock market, indicate the necessity of coming out with consolidated accounts mandatory," DCA secretary V K Dhall said while addressing the National Workshop on Accounting Standards, organised by Confederation of Indian Industries (CII).

"There are a large number of subsidiaries of companies and if you have consolidated accounts then any cover-up of fund flow can be detected," he said.

This need for consolidated annual accounts also arose since a large number of Indian companies have been opting for overseas listing.

"Gone are the days when profit and loss accounts and balance-sheets were an inside exercise of accounting department of the company. The taste of stakeholders has changed and the investors want to understand what is said in the balance-sheet and what is not said," Dhall said.

Dhall also said that the high-level committee headed by Naresh Chandra was looking into the audit system and the need for random review of accounts. The committee is holding its first meeting on August 29.

PTI