Relevance of Accounting Practices of Arthashastra in Today’s Business World

According to Kautilya, the most important element of the state is the Treasury or Finance and without it the well being (yogakshema) of the people may not be possible. Kautilya, the writer of Arthashastra, mentioned that a strong and wealthy monarchy would be in a position to protect the interest of the people against the invasion of other kings. In Arthashastra, Kautilya emphasized on creation of a welfare state where the government plays a key role in the protection and promotion of the economic and social well-being of its citizens. Kautilya was of the opinion that treasury was the most important ingredient for a State’s prosperity and for this reason strict guidelines were provided for maintenance of proper accounting system. The present accounting principles and standards are very much similar those that used in the Arthashastra during 4th Century B.C. It covers the accounting principles and standards, role and responsibilities of accountants and auditors and also the methodology of accounting, auditing and provides necessary steps for prevention of misappropriation and fraud.