A Review of Indian and International Accounting Standards and Practices in India

“Accounting is as old as money itself”. Chanakya in his Arthashastra emphasized on the existence and the need of proper accounting and auditing. However, modern system of accounting owes its origin to Pacioli who lived in Italy in the 18th century. In those early days, business transactions were not so complex due to the existence of small and easily manageable organizations, which were managed by the proprietor himself. “Accounting to be useful on an integral basis for economic development must be convenient and practiced in a broad context. It must encompass the private and public enterprises (financial and management) and government and national accounting, these branches of accounting refers to accounting information system.” Accounting standards have been and are being formulated at different levels. At the international penal, the accounting standards are set up by the International Accounting Standards Board. For different countries, the accounting standards are formulated by duly recognized and constituted authority keeping in mind: the objective of harmonizing the national accounting standards, and the legal provisions of accounting practices and other factors relating to that particular country. According to AICPA-1 (1973), “Accounting standards may be regarded as a principal which has been logically derived from the objective of accounting, which has been awarded the stamp of authority with the intention of producing guidelines for formulation of accounting practices comparable with the objective”. In this paper, an attempt has been made to exhibit the disclosure practices in India by Indian companies by dividing them into three levels as per the Institute of Chartered Accountants in India (ICAI) norms and further a questionnaire survey has been conducted to reach a conclusion that up to what extent Indian companies are complying with the Indian as well as international accounting standards.