research paper on indian accounting standards

• Original Research
• Published: 29 September 2020

Indian GAAPs, IFRS, and Its Comparison: An Empirical Critique

• Neha Puri   ORCID: orcid.org/0000-0002-7386-5027 1 &
• Harjit Singh   ORCID: orcid.org/0000-0001-5557-2071 1  

SN Computer Science volume  1 , Article number:  315 ( 2020 ) Cite this article

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Globalization plays a vital role in making the financial markets of the world borderless, and as a result, businesses (including small- and medium-sized enterprises) are competing for equity at the best price everywhere possible. Investors and borrowers seek investment opportunities wherever they can obtain the best returns per the risks involved and assess the risks and returns associated with various investment opportunities that require accurate and credible financial information for investors and borrowers [14]. The present study examines the perception of the accounting professionals towards the comparison of Indian GAAP [Generally Accepted Accounting Principles (GAAPs) are those concepts and conventions on which the accounting system is based. The primary objective of these principles is to bring uniformity and consistency in the preparation and presentation of final statements] with IFRS [To create a common accounting language throughout the world, so that businesses and their financial statements can be consistent and reliable across nations, and International Financial Reporting Standards (IFRS) were created by International Accounting Standards Board (IASB) in the year 2001].

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Puri, N., Singh, H. Indian GAAPs, IFRS, and Its Comparison: An Empirical Critique. SN COMPUT. SCI. 1 , 315 (2020). https://doi.org/10.1007/s42979-020-00327-4

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A Study of International Accounting Standard & Indian Accounting Standard

by International Res Jour Managt Socio Human

As time changes development of international accounting standard arises, accounting standard differs in each country. This paper focuses on procedure of issuance of International & Indian Accounting Standard, key difference in presentation of financial statement under International & Indian Accounting Standard. Key benefit in harmonizing accounting standard is common accounting system that is perceived as stable, transparent & fair To investors, shareholders, employees, creditors and public at large finally we submit that the standards set by the ias/ifrs constitute the step forward in the process of harmonization.

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The issue of International Accounting harmonization has been drawing the attention of accountants, academicians and business people since almost the beginning of the present century. Accounting standards are generally issued in conformity with the provisions of the applicable laws of the land, its customs, usages and business environment. The basic idea behind accounting standard setting is that financial disclosures, made through financial statements, are used as a means of discharging corporate accountability to its providers of funds. Over a period of time need arises to develop International Accounting Standards as accounting standards vary from country to country. As a result of this International Accounting Standards (IAS) and International Financial Reporting Standards (IFRS) are developed which can be accepted by more than single country. This paper focuses on procedure of issuance of International and Indian Accounting Standard, need of harmonization of global accounting standard and key difference in presentation of financial statement under International & Indian Accounting Standard. Key benefit in harmonizing accounting standards is common accounting system that is perceived as stable, transparent& fair to investors across the world. Cross-border merger &acquisitions will get a boost by making it easier for the parties involved in as per as redrawing the financial statements is concern.

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Accounting is the science of communicating the financial information of the business organization in an organized manner. Before communicating the business information it is necessary to record the actual business results in a scientific manner so as to ensure the true and fair view of the transactions. Financial information disclosed with true and fair state will get absolute confidence from various stakeholders. India is also one of the country which is recognized at the global level by initiating IFRS based accounting standards from the year 2016 onwards by government of India with the help of MCA and ICAI and started to mandate these standards for Indian companies in a phased manner. The implementation of this IFRS based Indian Accounting standards i.e. IND AS had created a great opportunity to academicians, regulatory authorities and business houses to carry the research for the advancement of the financial reporting system in India. So the present study is intended to analyse the role of IND AS in harmonizing accounting standards in Indian scenario.

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Accounting has no meaning without standards due to professionalism. The use and application of standards in accounting gets so importance that it will not go wrong if it is termed as a legal discipline. By the time, the world has given accounting the certification of international discipline. So, it is apt to say that as an international discipline, accounting should have a single set of standards for all for harmonizing the practice in a global scenario. But the reality is that we still have various streams of accounting standards like US GAAP, UK GAAP, IAS, and so on. These different streams are the threat for accounting against its harmonization of practices. Though the world has witnessed a lot of initiatives taken to reduce the streams into one in recent years, still we cannot ensure the final sophistication in this regard. The paper focuses on the convergence issue, its current status, challenges with special reference to Indian perspective.

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Boamah Charles

Accounting plays an important role in the economic affairs of a country such as the calculation of national and personal income, the administration of taxation and credit facilities, the costing of government expenditures, and the appraisal of investments and financial reporting of corporations to the markets. The quality of accounting information is vital to the functioning of a company, and therefore to efficient resource allocation. Accurate information about the financial performance of the enterprise is essential for planning and control purposes, and it is crucial to every economic decision. Hence, the accounting rules must be properly designed in order to not allow the distortion of financial facts, which would then lead to the misallocation of resources in non productive uses. Nowadays, the world economies are increasingly interlinked. As a result, as McKee and Garner (1992) argue, the accounting services will have to adapt in order to meet the widening needs of the business community. Therefore, the international community has been working toward establishing international accounting standards that would assist in compiling sound, understandable and comparable financial statements of across borders. The efforts for international accounting standards setting started in 1973 when the International Accounting Standards Committee (IASC) was established in London, and they culminated in 2005 when the European Commission (EC) began requiring all European Union (EU) listed companies to prepare their consolidated financial statements according to international accounting standards. Many developing countries are trying to adopt IAS/IFRS (hereinafter, referred to as IFRS) issued by IASB and its predecessor IASC that will help companies to prepare useful accounting information for domestic and foreign investors. However, the adoption of these accounting standards faces many difficulties related to these countries' traditions and characteristics of economic development. Accounting system in developing countries should be considered as part of the necessary infrastructure to achieve economic development. Accounting has a significant role in a country's information system, the magnitude and the strength of which can determine in large part the rate at which the economy will progress. Thus, sound accounting systems need to be established with the ultimate objective of providing reliable information support for the economic development process. This paper analyzes the applicability of the IFRS in developing countries and their role in economic growth. The main topic discussed here is the relationship between accounting and economy in these countries.

Purpose: The purpose of this paper is to study and analyse the possible impact of International Financial Reporting Standards on the level of earnings management. The paper includes a review of all such studies from around the world. Design/Methodology: Existing studies available on the topic are systematically reviewed. Different journals, periodicals and websites were used to gather the information. Time period considered for the study is from 2005 to 2019. Although most of the papers relate to foreign countries as not much research is available in the Indian context. Overall, 60 papers were considered, but out of them only 40 were found to be suitable for the present study. The review has been segregated into 3 parts. 30% of the paper focus on the meaning and determinants of earnings management, 20% of the studies relate to IFRS adoption around the world. Remaining research tries to analyse the connection between adoption of international standards and level of earnings management. Findings: The adoption of IFRS standards has no significant impact on the level of earnings management of any country. In fact, the level has increased in some countries after the compulsory adoption. However, if certain other factors are taken into account along with IFRS like audit quality, corporate governance practices, board management, R&D disclosure, enforcement mechanism, investor protection regime etc., the combined effect have yielded different results for different countries. Research Limitations and Implications: The study focuses only on one major area related to IFRS i.e., its impact on earnings management of a firm. Although there are many other determinants of earnings management and also IFRS had its impact on various other areas. But due to certain research limitations those are not considered Purpose: The purpose of this paper is to study and analyse the possible impact of International Financial Reporting Standards on the level of earnings management. The paper includes a review of all such studies from around the world. Design/Methodology: Existing studies available on the topic are systematically reviewed. Different journals, periodicals and websites were used to gather the information. Time period considered for the study is from 2005 to 2019. Although most of the papers relate to foreign countries as not much research is available in the Indian context. Overall, 60 papers were considered, but out of them only 40 were found to be suitable for the present study. The review has been segregated into 3 parts. 30% of the paper focus on the meaning and determinants of earnings management, 20% of the studies relate to IFRS adoption around the world. Remaining research tries to analyse the connection between adoption of international standards and level of earnings management. Findings: The adoption of IFRS standards has no significant impact on the level of earnings management of any country. In fact, the level has increased in some countries after the compulsory adoption. However, if certain other factors are taken into account along with IFRS like audit quality, corporate governance practices, board management, R&D disclosure, enforcement mechanism, investor protection regime etc., the combined effect have yielded different results for different countries. Research Limitations and Implications: The study focuses only on one major area related to IFRS i.e., its impact on earnings management of a firm. Although there are many other determinants of earnings management and also IFRS had its impact on various other areas. But due to certain research limitations those are not considered

Murat SERÇEMELİ

The existence of particular accounting and reporting systems for companies operating in different countries creates a difficulty in making comparisons among these companies. One of the most important attempts to fix this problem is the enforcement of IFRS as a single standard in all countries. The aim of this research is to identify the current situation of G20 countries regarding the adoption of IFRS as a global standard. To this end, the current status of IFRS and the process of its adoption in G20 countries is examined in order to determine the extent of IFRS's adoption as a global accounting standard. For this purpose, certain criteria are determined by analyzing the reports prepared by IASB on the IFRS applications in 143 countries and then content analysis of the country reports of the G20 countries are provided based on these criteria. According to the findings of the study, although it is possible to observe that all G20 countries except USA accept IFRS as the global accounting standard, this does not lead to the adoption of IFRS at the national level. Most G20 countries either adopted IFRS or making preparations for its adoption. However, the facts that IFRS is not applied in the world's two biggest economies, USA and China, as well as in Indonesia and India and its only partial application in Saudi Arabia and its status of optional application in Japan are striking. As a result it is possible to claim that even though IFRS has expanded largely, there is still room for progress to become the single global accounting language. Current literature on IFRS usually focuses on single countries or comparisons of few countries. This study will provide a contribution to the field by presenting the current situation in the entire G20 countries.

Donna Street , Sidney Gray

1999, The International Journal of Accounting

The present paper involves the study of the conversion of the corporate reporting from the National accepted GAAP principles to IFRS standards as to what changes it makes on the earning management system that is the financial statement of the companies and how does it affect the companies economically and what significant change has the reporting resulted in before and after adoption. Basically, the IFRSs were made to create a common business language amongst different countries and had introduced harmonization so that the investors could invest money cross-borders without much complication on contemplating of the reporting standards. So, with this view the companies would have to comply with certain global principles but, changing the way of reporting demands the change in the entire accounting procedures from the accountants, who would prepare the financial statements to auditors to give assurance to investors whose economic decisions will be affected. So, such a huge change would demand personnel proficiency update which would have impact on the company economically and the impact of IFRS adoption on the retained earnings and difference that arise known as the “GAAP GAP” on the equity management before and after adoption.

Prof Javaid Akhter

2015, Nitte Management Review

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Indian Accounting Association List of Research Paper Published in Indian Journal of Accounting