New Delhi, Dec. 15: Government accounting standards will be overhauled as the present system is not transparent enough.
Comptroller and Auditor General (CAG) of India V. . Kaul today said there was a need to review the government accounting system to bring about transparency.
Addressing a seminar here, Kaul said a strong political consensus was essential for the overhaul of the present accounting system.
He said the present method of cash-based system of accounting is outdated and needs to be replaced with the double-entry accrual system of accounting to usher in a more transparent and authentic method of accounting — a view held among a wide section of practising chartered accountants.
“There is a realisation that the existing government accounting system in India needs to be reviewed,” Kaul said.
He said the main criticism of the current system was on lack of transparency and that it could not be used for meaningful cash management or rational resource allocation, apart from lacking uniformity in measurement norms and inadequacy in disclosure standards in financial statements.
Kaul said any accounting system had to be part of a large integrated public financial management initiative.
He said, “A strong political consensus on a new direction for the accounting system is essential before any overhaul of the system is undertaken.”