ICAI rescues AAP

Yes you heard it right… Our ICAI can most probably help the Aam Aadmi Party alias Mango People Party regain its popularity. ICAI can help AAP rekindle, reignite and rejuvenate its lost sheen. But it’s up to AAP to grab this opportunity with both their hands. Now you might be wondering what ICAI has to do with the popularity of Political Parties? Right?... Even I was thinking alike☺…

It’s a must read for all of you especially CA’s and aspiring CA’s like me☺☺☺

And here is our answer…

The AAP has a website which denotes all the donations that the party has been receiving since its inception on November 26, 2012 along with its source and the name of donor and the list keeps updating as soon as donations are received. It also contains a table which tabulates the top six countries from which donations are received. Unsurprisingly, 76% of the donations are from India.

Moreover their website also contains a declaration that they will operate with 100% transparency in their financial activities and procedures. They say that every single rupee donated to the party will be updated in the website along with the details of the donor. Further they also boast off disclosing each and every expenditure immediately.

Even though the donations received and the names of donor are easily accessible in the website but the expenses incurred are not easily available on the website- especially not as quickly as they say.

Now here ICAI comes to rescue the AAP. In 2012, ICAI came up with a Guidance Note on Accounting and Auditing of Political Parties, which contains all the nuances of disclosing expenditures and is a comprehensive set of techniques of accounting and auditing. Even though a Guidance Note cannot be said as a one stop solution or a note from Bhagwat Geeta, but a party like AAP whose most cherished and enshrined virtue is to establish a non- corrupt India can certainly follow this Guidance Note.

This Guidance Note debates and concludes that the political parties should follow accrual system of accounting and of the 32 accounting standards issued by the ICAI, 12 of them stands inapplicable and irrelevant for the political parties which are as follows:

ü Construction Contracts

ü Amalgamations

ü Borrowing Costs

ü Segment Reporting

ü EPS

ü Consolidation

ü Taxes

ü Investment in Associates

ü Investment in Joint Ventures

ü Discontinuing Operations

ü Interim Financials

ü Impairment of Assets

The Note also presents formats for preparation of financial statements and audit reports. Therefore AAP should try and follow the above Guidance Note to disclose all its expenses judiciously. Off late, AAP has been criticized for everything they have done but they can rebuild their lost pride if they start following at least this accounting technique.

It’s obvious that AAP always brags about it anti corruption notion but their deeds nowadays are not justifying their motive. However AAP can justify their means to reach ends by following this accounting governance.

Now the fundamental question that arises in our minds is: Who will manage the accounting aspect of AAP? Will it outsource it to E&Y, PWC, Delloite, KPMG? Hold on, we are forgetting someone in the party itself… Yes you got it right… He is the former ex-director & CFO of IT Giant INFOSYS and his name is V. Balakrishnan. The party cannot just ask for a better person than him. He is the most suited man for this job.

It’s high time that AAP start considering better alternatives to increase its popularity rather than howling in Gujarat, otherwise it would be called as JAPP- Just Another Political Party.☻☻☻

If you really enjoyed learning then please share it among your near and dear ones (by pressing the share button) and spread it so much that a party like AAP, which is the need of the hour for INDIA, start applying this Guidance Note. JAI HO

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