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Compliance With Accounting Standards In The Globalized Indian Banking Scenario

4949 words - 20 pages

This reading highlights various accounting standards and their compliance in the Indian banking system. These accounting standards rule the criteria for accounts measurement, where to a great extent, they created uniformity in reporting and analyzing with reasonable flexibility by considering various circumstances of different enterprises. The focus is on AS-5, AS-9, AS-15, AS-17, AS-18, AS-22, AS-23, AS-25 and AS-27.Accounting has been defined in multivarious dimensions. The most lucid among them is "the art of recording, classifying and summarizing in a significant manner and in terms of money, transactions and events which are, in part at least, of financial character and interpreting the results thereof." In the evolutionary plane the accounting system has been refined from time to time and has traversed a long journey. The divergences and dichotomy in interpretations have led to the idea of accounting standards so that stake holders can compare and analyze financial data of different organizations to make financial investment decisions. Thus, accounting standards have led to burying hatchets and accounting system has been streamlined. They have provided valuable direction in the field of accounting and have brought about qualitative improvement in financial reporting. The accounting standards have laid down rules and criteria for accounting measurement and have been capable to a great extent in bringing uniformity in accounting practices with a reasonable degree of flexibility, taking into cognizance the differences in circumstances of various enterprises.#Accounting Standards in IndiaInstitute of Chartered Accountants in England began making the accounting standards prescription since 1942. The Accounting Statements Committee (ASC) was framed in 1969 to further this prescription. In USA, the need for evolving accounting standards was felt in the year 1933 with the establishment of the Securities Exchange Commission (SEC). A research-oriented organization called the Accounting Principles Board (APB) was formed in 1957 to spell out fundamental accounting postulates. FASB, which was established in 1973, pronounces GAAP and has issued around 100 financial accounting standards.The prime function of accounting standards is to provide a creative frame work or system through which qualitative and stake holder-oriented financial statements and disclosures are generated. With the basic objective of harmonizing the varying accounting policies and practices in India, the Institute of Chartered Accountants of India (ICAI) formed the Accounting Standards Board (ASB) on April 22, 1977.The International Accounting Standards Committee (IASC) was also established in 1977 with the objective of developing accounting standards, reviewing existing accounting standards and providing helping hand to countries in developing accounting standards with the underlying object of establishing a unitary accounting system globally. ICAI is a member of IASC. International...

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