The term “Green” means eco-friendly or not damaging the environment. Green accounting can be defined as systematic identification quantification, recording, reporting & analysis of components of ecological diversity & expressing the same in financial or social terms. “Green Auditing”, an umbrella term, is known by another name “Environmental Auditing”. Environmental auditing is essentially an environmental management tool for measuring the effects of certain activities on the environment against set criteria or standards. Organizations of all kinds now recognize the importance of environmental matters and accept that their environmental performance will be scrutinized by a wide range of interested parties. Environmental auditing is used to investigate, understand and identify.