Peculiar Ltd., an unlisted company, did not prepare its financial statements for the year ended 31st March, 2016 in conformity with some of the mandatory accounting standards. With reference to the provisions of the Comp

In accordance with the provisions of the Companies Act, 2013 as contained in Section 129 read with Section 133 financial statements of a company shall be prepared in compliance with the accounting standards. Section 129(5) states that where the financial statements of the company do not comply with accounting standards, such companies shall disclose in its profit and loss account and the balance sheet- the deviation from the accounting standards; the reasons for such deviation; and the financial effects, if any, arising out of such deviation. The Board of Directors is required under Section 134 of the Companies Act, 2013 to include, in Board's report, a Director's Responsibility Statement indicating therein that in the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures. As per this provision the directors need to ensure that the annual accounts are prepared in accordance with the accounting standards. The statutory auditor of the company has a duty to state if, in his opinion, the financial statements are not in compliance comply with accounting standards.