Implementation
of accrual accounting in Government.
Comptroller and Auditor General of India has
constituted a Government
Accounting Standards Advisory Board (GASAB) to establish and improve
standards of governmental accounting and financial reporting and
enhance accountability mechanism. CGDA is one of the members of the
Board.
2.The Twelfth
Finance Commission in their Report submitted to
Government of India at Chapter 14- Institutional Changes and Reforms
have recommended introduction of accrual based system of accounting.
The Government has accepted this recommendation in principle and GASAB
has been asked to draw a detailed road map and operational framework
for its implementation.
3. The
accrual accounting system is based on accrual concepts,
depicting the financial position of an entity more completely and in an
integrated manner than a cash-based system does. It does so by
recording assets, liabilities, revenue and expenditure in an integrated
manner. The principal area where an accrued based system scores over a
cash-based system is that the former records both cash and non-cash
transactions, thereby being able to capture a more complete and
wholesome picture of operations at most instants of time. Accrual
accounting system enables better internal control, better quality
information for decision making, a more complete and transparent view
of the financial position of the Government. The system enables a more
effective assessment of the performance and provides the necessary
information for linking the input costs to outputs and outcomes that is
required by Government.