Finance Minister P Chidambaram today said he will work with the CAG to dispel the impression of adversaries, even as the public auditor stressed that it would endeavour to provide honest and objective feedback to the government without fear or favour.

"Unfortunately, however, some dissonance has crept into the public discourse and for reasons which are inexplicable, the CAG and the government have been cast as adversarial to each other.

"Perhaps this in the nature in the functions of the government and CAG," the Minister said while addressing a Comptroller and Auditor General (CAG) conference here.

"It is my intention and desire as Minister of Finance to work with CAG to erase the impression of adversaries and restore trust and confidence in all institutions of government," Chidambaram added.

Auditors, according to CAG Vinod Rai, are neither adversaries nor fault finding experts though they endeavour to provide honest and objective feedback to the government.

"Audit is not an adversary. Neither is it merely a fault finding mechanism. We like to see ourselves as providing an objective and balanced feedback to the government without fear or favour," Rai said.

These comments by two senior functionaries come in the backdrop of criticism of CAG by government on its reports on coal block allocation, 2G spectrum among other issues.

Policymaking, Chidambaram said, "is often through trial and error. Decisions are taken often without full info and in an environment of uncertainty. Audit is a post decision exercise. Perhaps because of the nature of functions, they are cast as adversaries to each other".

Rai, however, clarified, "we do not for a moment think that it is our business to tell the government what to do and what not to do. We tell the government, through our audit reports, whether departments were able to achieve what they set out to achieve."

CAG, Chidambaram said, has played a key role in addressing issues of good governance and the government is obliged to take necessary actions to address gaps in governance.

Chidambaram said, "The recent opinion of the Supreme Court has brought about a great degree of clarity".

The Supreme Court in its September 27 opinion had said that auctions are not the only permissible method for disposal of natural resources across sectors.

Rai, on his part said, the benchmark against which the auditors examine and assess the performance of the departments were not created by them, but by the government itself.

"If government lays down a policy, we see whether that policy is being implemented. Government lays down the rules, we see whether these rules are being followed," Rai added.

He said the CAG has been advising Government on the need to bolster internal audit mechanism within the departments.

Rai said financial statements are expected to provide a true and fair view of the state of affairs of the entity.

However, cash-based accounting system followed in India has ceased to reflect the true state of affairs of the governments as neither the assets nor the liabilities get properly reflected under the cash based system, he said.

"Yet we have achieved very little progress towards an accrual based system which will provide a better idea of our assets and liabilities. We reiterate our commitment to continue our efforts towards implementation of accrual based system," Rai said.