Uniform Format of Accounts

for the Central Autonomous

Bodies

Financial Audit of Autonomous 1

Bodies Uniform Format of Accounts
 Session Overview
• We have covered discussion on:
• legal mandate,
mandate
• audit objective, audit scope and audit
process in audit of financial statements of
autonomous bodies:

Financial Audit of Autonomous 2

Bodies Uniform Format of Accounts
 Session Overview
• and different and important Accounting
Standards applicable
pp to autonomous bodies
while preparing or presenting their financial
statements;;
• Besides we have also discussed risk
assessment and internal controls in
autonomous bodies.

Financial Audit of Autonomous 3

Bodies Uniform Format of Accounts
 Session Overview
• Companies Act, 1956 specifies the format in
which companies registered under the Act are to
prepare and present their financial statements.
• A uniform format has been prescribed in the Act
f the
for h companiesi so that
h persons interested
i d in
i andd
users of information contained in the financial
statements are in a position to appreciate and
comprehend the data in the context in which the
company
p y has presented
p the data.
Financial Audit of Autonomous 4
Bodies Uniform Format of Accounts
 Session Overview
• Autonomous Bodies may or may not be registered
under the Companies Act, 1956.
• Iff they
h are registered
i d under
d theh Companies i Act,
1956 they have to follow the provisions of the Act
(including format for financial statements) for
preparing and presenting their financial
statements.

Financial Audit of Autonomous 5

Bodies Uniform Format of Accounts
 Session Overview

• However
However, if they are not registered under
the Companies Act, they need not follow
the provisions of the Act for presenting their
financial statements.

Financial Audit of Autonomous 6

Bodies Uniform Format of Accounts
 Session Overview
• Autonomous Bodies are usually non-profit
organizations
g engaged
g g in different and
diverse activities.
• They receive substantial amounts of grants
and/or loans from the Governments at
Center and in the States
States.

Financial Audit of Autonomous 7

Bodies Uniform Format of Accounts
 Session Overview
Till recently there was no set standard of form
for ppreparation
p and presentation
p of
accounts.
• It was also observed that the method of
presentation of accounts by them was
totally dismal and not keeping with the
requirements of transparency and exposure
of professional skill of these organizations.
organizations
Financial Audit of Autonomous 8
Bodies Uniform Format of Accounts
 Session Overview
• They did not give a lucid presentation of
their accounts;;
• large number of items of accounts in all
such organizations generally remained
incomplete,
• un-scrutinized,
un scrutinized
• and in arrears for several years.

Financial Audit of Autonomous 9

Bodies Uniform Format of Accounts
 Session Overview
• In view of this problem, Parliamentary Committee
on Papers in its 60th Report laid on the table of
Rajya Sabha on 27th March 1998 felt that there is
an urgent need of reviewing the method of
ppresentation of accounts by y the Central
Autonomous Organizations and impressed upon
the Government to set up a Committee of Experts
to work out a format prescribing a standard norms
of accounts to bring similarity and transparency in
the presentation of their accounts.
Financial Audit of Autonomous 10
Bodies Uniform Format of Accounts
 Session Overview
• The Ministry of Finance accordingly constituted a
Committee of Experts on 26th May 1999
(committee reconstituted on 9th February 2000) to
give their recommendation on different matters
relating to acco
accounts.
nts The committee submitted
s bmitted its
report to the Government on 15th November 200.
The report also contained a uniform form of
Financial Statements for the Central Autonomous
Bodies.
Financial Audit of Autonomous 11
Bodies Uniform Format of Accounts
 Session Coverage
• In this session we will discuss the
recommendations of the Committee of
Experts and also the recommended uniform
format of financial statements applicable
pp to
central autonomous bodies.

Financial Audit of Autonomous 12

Bodies Uniform Format of Accounts
 Learning Objective

• At the end of the session, the learner will be

able to state:
• the different recommendations of the
Committee of Experts set up by
Government of India on the
recommendations of the Parliamentary
Committee on Papers; and

Financial Audit of Autonomous 13

Bodies Uniform Format of Accounts
 Learning Objective

the uniform form of Financial Statements

applicable
pp to Central Autonomous Bodies,,
to the extent that he or she will be able to
apply
pp y these recommendations and uniform
format while preparing the financial
statements of Central Autonomous Bodies.

Financial Audit of Autonomous 14

Bodies Uniform Format of Accounts
 Terms of Reference of the
Committee of Experts
• i. To prescribe a standard or model format
of accounts and accounting g reports
p which
Central Autonomous Organizations could
adopt.
p
• ii.To suggest measures to enable clarity,
transparency and simplicity in the
presentation of accounts of such
organizations
organizations.
Financial Audit of Autonomous 15
Bodies Uniform Format of Accounts
 Terms of Reference of the
Committee of Experts
• iii. To suggest measures to enable evaluation
through the accounts to the extent of achievement
of socio-economic objectives of the organization,
especially with regard to grants released by the
Go ernment
Government.
• iv. Any other matters, which would enhance
analytical and effective presentation of accounts of
autonomous organizations.

Financial Audit of Autonomous 16

Bodies Uniform Format of Accounts
Major deviations noticed by the
Committee
• In most of the cases accounts are
maintained on cash basis and not on
accrual basis.
Fixed assets are not depreciated in case of
some entities.
For income
income-tax
tax exemptions
exemptions, certain
accounting treatments will be required.

Financial Audit of Autonomous 17

Bodies Uniform Format of Accounts
 Recommendations of the
Committee of Experts
• All the autonomous organizations should
ffollow one common fformat ffor its
accounting and presentation of accounting
f
information.

Financial Audit of Autonomous 18

Bodies Uniform Format of Accounts
 Recommendations of the
Committee of Experts
• Within the common format of accounts,
ffurther additional information
f mayy be
given as is prescribed for the Central
Universities and other Educational
Institutions and for the District Rural
Development
p Agencies.
g

Financial Audit of Autonomous 19

Bodies Uniform Format of Accounts
 Recommendations of the
Committee of Experts
• The Financial Statements and its
schedules will p
provide ffull disclosure off the
organization and all its accounting
information.
f

Financial Audit of Autonomous 20

Bodies Uniform Format of Accounts
 Recommendations of the
Committee of Experts
• The Accounting will be based on the
pprinciple
p off ‘Accrual System
y off
Accounting’ and the concept of ‘Going
Concern’ will have to be maintained.

Financial Audit of Autonomous 21

Bodies Uniform Format of Accounts
 Recommendations of the
Committee of Experts
• Provision for Depreciation on Fixed Assets
is to be made applicable
pp in respect
p off all
the autonomous Organizations.

Financial Audit of Autonomous 22

Bodies Uniform Format of Accounts
 Recommendations of the
Committee of Experts
• The committee recommends that the
Financial Statements ffor the Central
Autonomous Organizations be prepared
and p
presented in the formats
f
recommended. The formats should be
pp
made applicable ffor all accounting
g years
y
commencing on or after 1.4.2001. Earlier
pp
application is encouraged.
g
Financial Audit of Autonomous 23
Bodies Uniform Format of Accounts
Recommended format for
financial statements

Financial Audit of Autonomous 24

Bodies Uniform Format of Accounts