Comparative Analysis of Accounting Standards vis-a-vis Corporate Governance Practice in India vs. China

Abstract:     
India and China are two emerging giant economies of the world. High annual GDP growth of these giant economies has drawn attention of whole world. China at production front and India at service sector front has taken lead in building robust economy. Corporate growth has earned trust among stakeholders and foreign investors due to better and ethical corporate accounting regulation and similar practices. This paper compares role of Accounting Standards in both country and their role in corporate governance practices.

Good Corporate Governance ensures better corporate performance, strong relationship with stakeholders, where the appropriate practice of Accounting Standards assumes immense importance at micro level, as effective disclosure leads to shareholders' wealth maximization and at macro level, they are essential to the efficient functioning of the economy because decisions about the allocation of resources/investment rely on credible, concise, transparent, comparable and understandable financial information about the corporate operations and financial position.

To practice Good Corporate Governance, information should be prepared and disclosed in accordance with high quality standards of accounting and financial and non-financial disclosure. This paper, critically examine the relevant Accounting Standards and comparison of such practices in India vs. China, to evaluate potency and fairness of Accounting practices vis-a-vis Good Corporate Governance.

Keywords: Accounting Standards, Good Corporate Governance, India, China

JEL Classification: M

working papers series