Vijayawada: The Institute of Chartered Accountants of India (ICAI) is confident that the Indian Railways will start implementing Double Entry Accounting System (DEAS) from 2017 thereby facilitating better management of its finances and assets.
The institute will be submitting the report of a pilot project done by it on DEAS in the Jaipur division to the Ministries concerned in August. The proposed adoption of a similar accounting system by the Ministry of Defence is being closely followed and the official nod for it is likely to be given next year, said ICAI national president M. Devaraja Reddy.
Addressing a press conference here on Saturday, Mr. Devaraja Reddy said the Ministry of Railways (MOR) had acknowledged the effectiveness of the accounting system mooted by the ICAI Accounting Research Foundation. The MOR was expected to give the green signal soon, facilitating regular auditing of railway establishments across the country in tune with the new accounting norms. Mr. Devaraja Reddy said the ICAI was firm on its stand that constitution of a National Financial Reporting Authority (NFRA), for which a provision had been made under Sec. 132 of the Companies Act, 2013, amounted to encroaching on the powers of ICAI.
Main areas of the topic include traffic revenue, balance-sheet accrual system, and fixed assets. By making a move to the institute, the chief purpose of the Indian Railways was to the convince the same for undertaking the tentative project on the study of current budgeting and the costing system. They wanted the institute to come up with a proposed plan for the outcome budgeting and the integrated cost accounting framework in agreement with the 2016 Union Budget. “Railways has got vast assets across the country and huge manpower. Hence, the double accounting system will help them to know how to manage those assets and manpower in a cost-effective manner,” told by ICAI President M Devaraja Reddy. The institute has recently undertaken a pilot study project of review of the capital expenditure procurement process and policy compliances framework on pro-bono basis of another state-owned PSU, Coal India” he said. Further, he added that a project on ‘migration strategy for implementation of accrual accounting system in EPFO’ has also been considered by ICAI and it has submitted the draft reports already.
The Quality Review Board (QRB) formed under Sec. 28A of the Chartered Accountants Act, 1949 was striving to ensure the quality of services rendered by the accounting professionals.
“The QRB and NFRA are bound to work at cross-purposes while the Ministry of Finance claims that the latter will be an overarching authority dealing with larger issues beyond accounting,” Mr. Reddy observed. Mr. Devaraja Reddy said efforts were being made to implement new syllabus from November. It was approved by the Ministry of Corporate Affairs and the clearance of Ministry of Law and Justice was awaited.
Speaking at ICAI’s sub-regional conference earlier in the day, Mr. Devaraja Reddy said there were 2.60 lakh chartered accountants in the country. Of them 1.10 lakh are doing independent practice and the others were employed in the corporate sector.
The ICAI has requested Chief Minister N. Chandrababu Naidu to allot five acres to the institute in Amaravati for setting up a Centre of Excellence there.
It will focus on skill development and continuing professional education.