Comparative Analysis of Fund and Accrual Accounting Applied in Public and Private Sector

ACCRUAL ACCOUNTING FOR LOCAL BODIES:
ELECTED REPRESENTATIVES & STAKEHOLDERS
The Institute of Chartered Accountants of India
(Set up by an Act of Parliament)
©The Institute of Chartered Accountants of India
All rights reserved
No part of this Booklet may be reproduced, stored in a retrieval system, or transmitted,
in any form, or by any means, electronic, mechanical, recording, or otherwise, without
prior permission, in writing from the publisher.
First Edition: January 2009
ISBN No. 978-81-8441-167-6
E-mail: caslb@icai.org
Website: http//www.icai.org
Published by
Dr. Avinash Chander, Technical Director
The Institute of Chartered Accountants of India
‘ICAI Bhawan’
Indraprastha Marg
New Delhi – 110 002
India
Printed by
  Foreword
The system of Governance in India has many constituents, one of which is the local
bodies such as Municipal Corporation, Municipalities, Panchayats etc. In a changing
environment, attempts are being made to make the local bodies accountable for their
actions. Proper financial reporting by local body is perhaps the most important means
to achieve the objectives of accountability and transparency. Traditionally, the local
bodies have been following cash basis of accounting for financial reporting since their
budgets, which are prepared on the cash basis, have been the principle means of
financial control.
In today’s scenario, the local bodies are a paradigm shift with regard to their financial
reporting system. Some of the local bodies have made sincere efforts to shift from the
existing cash basis of accounting to variants of accrual system of accounting. This is a
welcome step by such bodies towards a more accountable and transparent financial
reporting system. The Government of India has taken number of initiatives particularly
Jawaharlal Nehru National Urban Renewal Mission (JNNURM) to bring the accounting
reforms in the local bodies... [continues]

Read full essay