# Section 133 — Central Government to Prescribe Accounting Standards
Section 133 of the Companies Act, 2013 deals with the power of the Central Government to prescribe the accounting standards that companies must follow.
## The Standard-Setting Process
The process involves a chain of consultation between multiple authorities:
```
ICAI (recommends) → Consultation with NFRA → Central Government (prescribes)
```
### Detailed Mechanism
1. ICAI (Institute of Chartered Accountants of India) makes recommendations on accounting standards or any addendum thereto.
2. The Central Government examines the recommendations of the ICAI in consultation with and after examination of the recommendations made by the NFRA (National Financial Reporting Authority).
3. The Central Government may then prescribe the standards of accounting or any addendum.
## Transitional Provision
Until NFRA is constituted under Section 132, the Central Government may prescribe accounting standards or addendum as recommended by the ICAI, in consultation with and after examination of the recommendations made by NACAS (National Advisory Committee on Accounting Standards) — the predecessor body.
## Effective Date of NFRA
The Central Government has notified NFRA from 1st October 2018. After this date, the consultation must be with NFRA (not NACAS) for accounting standards prescribed under Section 133.
## Key Terms
- Addendum: Additional material added to an existing standard.
- ICAI: The professional body of Chartered Accountants in India that develops technical accounting standards.
- NFRA: An independent regulatory body established under Section 132 of the Companies Act, 2013.
- NACAS: The predecessor body that advised the Central Government on accounting standards before NFRA was constituted.