A Comparative Study of Global Accounting and Indian Accounting

Accounting is a tool to quantify all economic and business transactions in terms of money. The economic and non-economic transactions are measured and compared from year to year and country to country with the help of accounting only. Hence, accounting is a backbone of evidence to identify the strength and weakness of any sector of the country. The accounting systems vary from country to country depending upon the nature of the business. The ancient accounting system has a narrow concept which has been followed within a country. Later in the ancient international trade, business tractions were based on the barter system. The traders followed informal accounting records for their business transactions, before the industrial revolution. Due to the industrial revolution (1760) there was mass production in the textile industries, steamindustries, and iron industries. The huge volume of production led to changes in the field of accounting. The spread of the industrial revolution across Europe, hence it requires a common accounting system among the European countries. The expansion of the volume of economic and business transactions gives the necessity of a globally accepted accounting system. Moreover, in the international trade, all countries around the world are involved in both imports and exports. Hence, the international accounting system is required to know the accuracy of global business transaction. India has its own accounting system which is based on the Indian Companies Act, 1956, later the Indian Companies Act, amended, 2013. The Indian Accounting Standard is applicable only to India, which is framed for Indian companies located in India. If any IndianCompanies located outside India have to follow the International Accounting standards.