ICAI helps political party to establish sound accounting principles

Workshop on election expenditure monitoring and

Auditing and Accounts of Political Parties

1. A workshop on “Election Expenditure Monitoring and Auditing and Accounts of Political Parties” was organised by Election Commission of India (ECI) on March 10, 2014.

2. The above workshop was attended by representatives of ICAI, officials of ECI and Auditors of some of the Political Parties.

3. A Presentation on “Guidance Note on Accounting and Auditing of Political Parties” was made by ICAI at the workshop which recommends:

a. Guidance note recommends that accrual basis of the accounting to be followed by the political parties in the preparation of their financial statements.

b. Guidance provide guidance that Accounting Standards issued by the ICAI to be followed to the extant relevant in preparation of financial statements by the Political Parties.

c. It recommends that General Purpose in Financial Statements of a political party should comprise of balance sheet, income and expenditure account, cash flow statement and notes forming part of financial statements.

4. At the workshop “draft guidelines on transparency and accountability in party funds and election expenditure matter” were discussed.

5. Some of the proposals from the aforesaid guidelines are as mentioned below:

a. Political Parties to follow the “Guidance Note on Accounting and Auditing of Political Parties” issued by the ICAI, in preparation of their financial statements.

b. Political Parties would be required to submit the commission a copy of audited annual accounts with the auditors report for each financial year before October 30 of each year.

6. It was also informed at the workshop that Statement of Expenditure on Legislature Assembly (MP & MLA election) is to be certified by the Chartered Accountants (from now onwards).

7. Financial Statements of political parties for the year 2013-14 are expected to be more qualitative.

In this regard CA.K.Raghu , President ICAI said “This endeavour of the ECI and ICAI will go a long way in establishing sound accounting principles for the Political Parties. This will ensure transparency & accountability in party funds and election expenditure.”