The Institute of Chartered Accountants of India (ICAI) through its research arm, ICAI Accounting Research Foundation (ICAI ARF) signed an MoU with Employee's Provident Fund Organisation (EPFO) on December 11, 2014. As per the MoU, ICAI ARF will undertake a Pilot Study Project with EPFO to support it in its initiative to migrate to Accrual Based Accounting System.
The project with EPFO represents the first phase wherein the ICAI ARF will study EPFO's existing accounting system with an intent to design the strategy for a smooth migration and transition to accrual system of accounting. CA. K.Raghu, President, ICAI said "The purpose of this project is to propose and design an accrual accounting structure that would help EPFO in addressing the challenges currently being faced by the organization thus making it ready for the future."
Globally the government organisations are moving towards adoption of accrual accounting. This project is the first step by EPFO towards its goal of migrating to accrual accounting. ICAI ARF will submit a "Report on the Migration Strategy at EPFO" which will form the basis of the next phases of the accounting system migration project. The project offers a unique opportunity to study the complex accounting aspects of the sovereign fund from a professional perspective.
CA Raghu said “The accrual accounting system will further allow EPFO to structure a financial management and reporting framework aligned to the international standards. The proposed system is also expected to provide for improved levels of financial management and performance evaluation to support EPFO’s objective to continue to strive to provide best services for the overall benefit of its subscribers."
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