Align accounting standards with best global practices: CAG

CAG Shashi Kant Sharma today called for aligning of accounting standards with the best global practices for better public financial management.
He also said that government auditor CAG and Controller of General Accounts (CGA) should work together to improve the government's accounting system and enhance accountability mechanism.
"The accounting standards need to be revised in tune with the best international practices. Some of the standards which were recommended by the Government Accounting Standards Advisory Board (GASAB) have been already notified by the Finance Ministry and some are under consideration which I am sure will be notified quite soon," Sharma said.

GASAB was set up in 2002 in the CAG's office. The CGA as well as heads of other accounting organisations like railways and defence accounts are active stakeholders in this board.
The recommendations of the board are sent to the Finance Ministry and it requires efforts and attention of all the stakeholders of public financial management to see that the standards are notified and implemented expeditiously, he said.
Enlisting few steps which are required for a modern e- enabled payment and accounting system embedded in the broader public finance management system, he said at a micro-level, format of accounts to keep pace with the developments in the area of international standards and stakeholders growing information need is due.

"It is also necessary to provide information regarding source of funds, beneficiary orientation of public expenditure and perhaps geographical tagging by using information technology," he said here at CGA function.

Further under receipts, he said an economic classification and linkage of tax receipts classification on sectors and sub-sectors of GDP in national income accounts could be explored.
The recommendations of the committee set up in this regard are under consideration of the government and added that he is sure to cull out a feasible agenda of action out of committees recommendation.
Subsequently, the matter was deliberated by the second
administrative reforms commission and by the committees set up by the government, Sharma said, adding that it is an important item for the CGA in particular and government in general.

"I am confident that concrete steps would be taken in this regard," he said.
Further, he said, under the Fiscal Responsibility and Budget Management (FRBM) Act, there is disclosure on what revenues the government has to realise and the revenue which is due and not realised.
"Similarly I feel there should be a proper disclosure of what the government owes in terms of unpaid claims for goods and services already supplied or consumed by it. Also improving the system of asset accounting continues to be part of the unfinished agenda as it is also an important ingredient of the governments obligations under the FRBM act," he said.

With regard to the processing of digital mass data, he said the potential of using the mass digital data generated in the process of compilation and consolidation of government accounts is huge.
"We have initiated steps to deal with the challenges posed by big data...In my organisation I have opened a big data management centre recently and one of the biggest data bases that would merit the application of advance data analytics tool is the data on government accounts from the transaction level to the highly aggregated accounts presented to the parliament," he said.