President's Message - Nov 2009

Dear CA Pariwar,

I am sure most of us are still sharing the Diwali happiness and good wishes with friends and family. The New YearVikram Samvat 2066 has dawned and has already ushered in a positive atmosphere. The markets are doing well; the economy is making strides and should grow by 6.5 per cent this fiscal. The forecast growth for next year at between 7 and 7.5 per cent would most likely retain India’s status as the second fastest growing economy in the world. FDI inflows for financial year 2009-10 have already touched Rs. 51,063 crore in July with 8 months left and a global economic recovery taking place. I expect the Reserve Bank of India to continue its accommodative monetary policy for the current financial year as it seems that the worst is over for the Indian economy with government policies bearing fruits. On the whole, Vikram Samvat 2066 promises to be a good year for the country.

CA-Shiksha

Ever since I became President of this great institution, I have made sure that the institution as a whole becomes IT savvy. To that end, I have implemented an IT programme which has resulted in the development of a robust IT infrastructure and a continuous IT development plan. With this plan in place, I believe it is now time to refocus our priorities towards our future.

“Child is the father of man,” so goes the saying, which means that the youth are the future. This is especially true for us when the number of students devoted to our profession has risen to 5,60,000 approximately. It has been my long time dream to provide a unique service to our students - a service that would make available better, regular, systematic and cost effective learning, that too at a time and place of the students’ convenience.

This dream has now turned into reality as we have launched a new website called CA-Shiksha(http://www.cashiksha.com) exclusively for students. CA-Shiksha is an initiative, an idea to transform learning, which will take students from passive e-learning to a dynamic i-learning (interactive learning). The CA-Shiksha platform will provide all our students a comprehensive package of online learning + video lectures + mock tests + assessment reports + quick revision notes making it a lot easier to grasp, understand and deliver. This bouquet of education tools will not only give students a better perspective but also prepare them in the most thorough way for their exams. The website will go a long way in making our students technology savvy and proficient in IT.

This online education initiative will cater to the coaching needs of students at no cost which would benefit many students from weaker sections of society who cannot afford classes or tuitions. Students from mofussil areas are on the increase and these students do not have access to guidance and coaching. Their prayers are answered with CA-Shiksha. Today, the personal interaction of teachers with the students is decreasing as the number of students increase. So, through this website we have proactively tried to bring many students in direct touch with mentors and guides who will give them as good a one-on-one interaction as one gets.

I am sure that this initiative will also go a long way in reducing the dependence of students on coaching classes. This would benefit both the students and our members as students now can easily adhere to their office working hours without worrying about leaving office to attend coaching classes as they have a private tutor at their beck and call. This will enable them to focus more on their practical training in office without compromising on their study.

I appeal to all our members to help popularise this website among the students for the ultimate benefit of our CA Parivar. This educational site was launched on the auspicious day of Diwali and I cannot think of a better Diwali gift than this to all our future members.

High Court Accords Exemption to ICAI-ARF

All our members are aware of the services provided by our Accounting Research Foundation. By name it is a Research Foundation but in actuality the Foundation works at the behest of local governments across the country to research and implement methods to improve and advance accounting practices used by government bodies. A good example is the Strengthening Rural Decentralisation (SRD) project of West Bengal carried out by us to implement accrual-based accounting reform in the Government.

In view of these voluntary services, we had applied for grant of exemption under Section 10(23C)(iv) of the Income-tax Act, 1961 for the assessment year 2007-08 onwards in 2006 which was refused by the Director General of Income Tax (Exemptions) Delhi. This unfair refusal prompted us to file a writ petition in the Delhi High Court. Once we established the fact that ICAI-ARF as a developer of research papers, quality documents and pronouncements met the description of a ‘Charitable Institution’, the High Court lost no time in setting aside the previous order by the Director General of Income Tax (Exemptions) and ensuring that ICAI-ARF is granted full status as a Charitable Institution. This is indeed legal attestation that ICAI-ARF is essentially established for the purpose of education and/or for advancement of any other project of general public utility. I take pride in the fact that our voluntary services to the government have been recognised as well as endorsed by our judicial system.

Australia Study Tour & Honour from ICAA

During this year, we, at the Institute, have made great efforts in promoting and building relationships between ICAI and other similar organisations on the international platform. Now, I believe, the time has come to recoup our efforts and implement programmes to take advantage of the bilateral ties that we have forged. To that end, the Institute recently organised an International Study Tour to Australia. A 33-member delegation visited different cities in Australia to get a better understanding of the economic and regulatory environment as well as actively look out for opportunities for Indian CAs in Australia. We also ensured an in-depth study by organising meetings with officials of the Institute of Chartered Accountants in Australia (ICAA) and CPA Australia as well as its members belonging to diverse industry groups. The recent MoU that was signed between ICAI and ICAA will make possible a host of opportunities and more recognition for Indian CAs in Australia.

During this tour, I was pleasantly surprised and highly honoured when Mr. Graham Mayor, CEO of ICAA awarded me an honorary membership of the ICAA. This was a historic moment for our Institute as it was the first time that such an honour was bestowed on any President of the ICAI. The honour was in recognition of efforts made to build ties across our respective organisations at international levels. I dedicate this great honour to our beloved Institute because of which this moment was made possible.

Members of our Institute are spread far and wide across the globe but they never forget their alma mater and their colleagues. This was amply proved by the ICAI Chapter in Australia which organised a members’ meet in Sydney, Canberra & Brisbane to commemorate the MRAs between ICAI and ICAA, and ICAI and CPA Australia.

That Australia presents a vast opportunity for us was amply demonstrated by the ICAI Chapter in Australia, which showcased prospects in agribusiness, property and mining sectors. This was reinforced by invited specialist speakers from the profession, trade bodies and business houses and more particularly by Director of CA Australia Mr. Bill Palmer, who spoke on the very pertinent topic of “How to do business in Australia”.

I am happy to note that the chapter in Australia is actively promoting our profession by opening a host of centres in Adelaide, Brisbane, Canberra, Perth & Sydney with further plans to open centres in Hobart, Darwin, Wollongong and Newcastle, in fact, at any city with more than 10 ICAI Members. Sydney itself hosts two Continuous Professional Development & Networking Events every month.

Due to this overwhelming response, we are enthused to organise a similar tour to United States of America in December which would provide our members a first hand experience to explore professional opportunities there.

Visit by Lord Mayor of London

The ICAI and ICAEW share a strong bond of friendship and respect for each other. To supplement and enhance this relationship, we had recently signed a MoU that brought the UK and Indian accountancy profession closer. This bond was further strengthened when the Lord Mayor of the City of London, Hon’ble Ian Luder recently visited us. This was truly a historic occasion as it was for the first time in history that the Lord Mayor of London specially came to India to visit a regulatory body. Never has it happened before and I am proud that it was our Institute that was bestowed this rare honour. During his visit, a conference on “A New Vision for Financial Services” was jointly hosted by ICAI & ICAEW in Mumbai. This event explored the implications of recent experiences for financial services and the businesses they serve and attempted to develop a vision for the future of a global financial architecture which would restore confidence in financial services. This event was attended by the top CEOs/CFOs of major corporates and banks, and senior members of the accountancy and legal profession who were part of the Lord Mayor’s business delegation. Senior experts from UK & India regulatory bodies, financial service providers and business also gave us the benefit of their expertise during the visit.

New Online Facility from Central Board of Excise & Customs

A new online facility has been launched by the Central Board of Excise & Customs (CBEC) on 14th October. This new online service is called ‘Automation of Central Excise & Services Tax’ (ACES). The Chief Commissioner of Central Excise & Service Tax, New Delhi sent a special invitation to our Institute inviting me as Guest of Honour for the launch. This is the first time that such an honour was bestowed to our Institute which indicates that increasingly the Government bodies recognise the Institute as a true partner in nation building.

This new service is a new centralised webbased software application of CBEC which provides us an online electronic interface with the department. ACES aims to reduce paperwork, visits to the department and transaction costs while increasing accountability, responsiveness, efficiency and transparency in indirect tax administration. The online facilities offered are many and include services such as registrations, filing of service tax returns, refund claims, filing of intimations, tracking, dispute resolutions and online viewing of our records. The Institute highly appreciates this service as it will make our work more efficient and linear.

Very few of our members have entered the excise and customs field of practice. However, now with ACES, I am sure it would attract more and more of our members to enter this field of practice, and would go a long way in widening the scope of professional opportunity. I hope that this service also enables our members to become more IT savvy while doing their work.

Status of Bank Branch Auditors’ Panel 2009-10

The draft Bank Branch Auditors panel for the year 2009-10 was hosted on the website on 6th October, 2009 for members’ information. We have received about 5,400 complaints till date, out of which 5,150 have already been resolved. Most of the pending complaints pertain to those corrections which have been noted for updating the draft bank branch auditors’ panel but have not yet been closed and the correction process is on. In fact, by the first week of November, 2009 all the complaints and communications from members will be resolved during the finalisation of the panel.

Initiatives on Direct Taxes Code Bill, 2009

As you are aware, we had invited members to submit their opinions on the Direct Taxes Code Bill, 2009 for consideration. The suggestions sent in by the members covered some vital points ranging from Ability to pay, Equitable Principle of equity, Principle of Natural Justice, Simplification in favour of assessee to what extent, Law of evidence - to what extent being ignored to the Negative impact on economic development of India and as a business centre. To ensure a clear understanding and any other clarifications regarding these issues we organised a lecture series in Mumbai, Kolkata and Bangalore on this Bill in co-ordination with the Ministry of Finance to generate discussions and bring about awareness about the proposed law.

These lectures brought about a lot of constructive and practical submissions which were deliberated upon very seriously by CBDT officials. Along parallel lines, we formed a Central Study Group comprising myself and Central Council members to look in-depth into the ramifications of the proposed law. This Central Study Group worked in close collaboration with senior CBDT officials to have a thorough understanding of the basic concepts behind the major policies adopted in the proposed Direct Taxes Code. The group then formed sub-groups across the country to discuss, collate and revert back with final inputs from members. These detailed inputs and their implications have been comprehensively discussed by us and we will soon give our final recommendations and proposals to the Ministry of Finance for consideration. This thoroughly comprehensive research, which is our hallmark, has been highly appreciated by the ministry and CBDT officials.

Interaction with the Insurance Sector

To foster a better understanding of new professional opportunities that have been provided to us by way of internal audit for insurance companies, I arranged a meeting with the CEOs, CMDs and CFOs of several insurance companies. This was to enable our members to gain an insight into the working of the insurance industry and to obtain the observations and suggestions from the industry itself regarding the implementation of several new regulations. I felt it important to record their observations coupled with their views on the upcoming GST, challenges in implementation of IFRS in the insurance industry, the impact of new Direct Taxes Code on the insurance sector and finally whether they had any definite opinions concerning the existing Accounting Standards pertaining to their industry.

I also stressed that their rich experience in the industry would be useful to our members if they could compile a handbook of compliances which would then be published by the ICAI as part of its initiative to pool this specialised knowledge for the benefit our fraternity. To further our understanding of this new sector, I invited them to work on research projects of their choice relating to insurance industry which could be funded by the Accounting Research Foundation of ICAI. Knowing that their continued inputs would be a guiding light for us in insurance sector, I urged all the invitees to add to our knowledge base by contributing articles and write-ups to our publications, particularly to The Chartered Accountant journal.

At the same time, keeping our Parivar in mind, I requested the officials present to formulate an insurance scheme for our members and students, the cost of which would be borne by ICAI as a part of its corporate social responsibility.

I am sure that future collaboration with the insurance industry in the knowledge area will be very fruitful for them as well as for our institute and profession.

Disciplinary Action in Satyam Case

As you know, the Institute has been at the forefront of the investigations into the Satyam fiasco. Being the arbitrators of discipline, we have gone ahead and started the procedure necessary to bring the investigations to a just conclusion. We have taken steps to bring the guilty to book. Show-cause notices have been issued to the auditors of M/s. Satyam Computer Services Ltd., viz. M/s PriceWaterhouse, Bangalore.

We have also proceeded against the members who have been accessory to the fraud with show-cause notices issued to Mr. S. Gopalakrishnan, Mr. Srinivas Talluri, Mr. P. Shiva Prasad, Mr. C.H. Ravindranath, Senior Vice-President (Internal Audit Cell) of Satyam Computer Services Ltd. Shri V. S. Prabhkara Gupta and Chief Finance Officer of Satyam Computer Services Ltd. Mr. V. Srinivasu. All of the above have been found to be prima facie guilty of Professional and Other Misconduct and it has been decided to proceed further in the matter under clause (b) of sub rule (2) of rule 9 of the Chartered Accountants (Procedure of Investigations of Professional and Other Misconduct and Conduct of Cases) Rules, 2007.

The case will continue till the Disciplinary Committee concludes its enquiry and passes judgement. Rest assured, I am doing everything in my power to bring this case to a swift and just end.

Geneva Session of UNCTAD Working Group of Experts on ISAR

I recently had the privilege of attending the UNCTAD’s 26th Session of the Inter-governmental Working Group of Experts on International Standards of Accounting & Reporting (ISAR) in Geneva. This was a great honour for our Institute as only the world’s top regulators and professional bodies were invited.

As you know, ISAR assists developing countries and economies in transition to implement best practices in corporate transparency and accounting in order to facilitate investment flows and economic development. It seeks to achieve this objective through an integrated process of research, intergovernmental consensus building, information dissemination and technical cooperation. ISAR is very broad based, covering areas such as IFRS implementation, accounting by SMEs, corporate governance disclosure, corporate responsibility reporting and environmental reporting.

In this session, discussions centred on capacity building efforts to strengthen accounting and reporting institutions. Also taken into consideration was the number of regional and international organisations that were active in the area of corporate transparency.

I presented my observations on behalf of the ICAI on the practical implementation of International Financial Reporting Standards (IFRS), accounting by small and medium sized enterprises, and corporate governance and corporate responsibility reporting. Secretary, MCA, Mr. R. Bandyopadhyay and Director, MCA, Mr. Manoj Arora also attended the session from our country.

Special Meeting of the Council

As per requirement of clause (5A) of Section 18 of the Chartered Accountants Act, 1949 a special meeting of the Council was convened on September 25, 2009, in which annual accounts of the Institute for the year ended March 31, 2009 were considered and approved. In the morning, the meeting was graced with the presence of Mr. R. Bandhyopadhyay, Secretary, Ministry of Corporate Affairs (MCA) and Mr. Mark Bolgiano, President and CEO of XBRL US jurisdiction. In the evening, the meeting was addressed by Mr. Anurag Goel, former Secretary, MCA.

Mr. Mark Bolgiano, President and CEO of XBRL US jurisdiction of XBRL International made a presentation to the Council mainly on the state of XBRL in the United States of America. He highly appreciated the ICAI for taking initiative to establish XBRL India jurisdiction and pointed out that in US also the XBRL initiative was taken by the AICPA as the accounting profession has a very crucial role in the development of XBRL in a country. He promised support of XBRL US jurisdiction to various activities being undertaken by the XBRL India jurisdiction established by the ICAI.

Infrastructure

The Institute grows with us and we grow with the Institute. This is the relationship which encourages us to provide better infrastructure for our members and students. You will be happy to know that the drive to boost the infrastructure is going on in full swing. In this regard, I firmly believe that we should move swiftly to ensure that we benefit from cost advantage in our infrastructure-related dealings. This is exactly why we purchased 500 sq. yards of land for our Kakinada Branch from Srimati Plivela Satya Raju Memorial Trust on lease for 35 years. The deal involves an annual lease rent of just Rs. 10,000 with a provision of renewal of lease with mutual consent. I have already laid the foundation stone of this branch building and construction work has begun. I am sure this upcoming ICAI premises will immensely benefit all our members and students under the Kakinada Branch of SIRC. Further, I have recently laid the foundation stone for a new Study Centre for Excellence at Kottayam, Kerala.

I am happy to note that our dream of putting in place a world class infrastructure for our members and students across the country is shared by members too, many of whom have in fact come forward to donate vast tracts of land to turn this dream into reality. You will appreciate that a member has donated seven acres of land to set up a centre of excellence in Pune district while two other members have donated several acres of land in Hyderabad and Chennai respectively. These members feel the need to give back to their alma mater which has been instrumental in sculpting their success and social standing.

Proposal for Centre of Excellence in Goa

Our Centres of Excellence are symbols – symbols of the Institute as a world class education and professional foundation. Hyderabad Centre of Excellence is already on the world map as a centre par excellence. To that, I am proud to say, we will soon be adding a Centre of Excellence in Goa. This centre, whose plans have been finalised and where construction will begin shortly, will be dedicated to our future – our students. It will be the finest centre of accounting education in the world.

This is not a dream but a much needed requirement. Today we have around 560,000 students who are a part of our Institution and who need a dedicated centre of education. Many students are from far flung places, small towns and villages which do not have access to proper educational infrastructure, libraries, study centres, etc. We must cater to these students’ needs. We must provide students from weaker sections of society their rightful education and place in society. I believe that to secure our future tomorrow we have to take action today.

The Goa Centre of Excellence will offer our students a complete and comprehensive educational experience - mentally as well as physically. Students will have complete access to world class educational infrastructure offering the latest modern technological innovations for education. The Centre will encourage students to enhance their skill sets in myriad ways through research projects. From the students’ perspective, this centre will facilitate a direct interaction with educators and mentors instead of one dimensional distance learning. But most importantly, this centre will foster amongst students a sense of pride and belonging to the Institute. It will build long lasting relationships which will greatly benefit the Institute in the long run.

The Council had committed to realise the dream of having 12 Centres of Excellence across the country, and now the Goa centre will soon be one of them.

Elections on Anvil

As you are all aware, elections to Central Council & Regional Councils are fast approaching and it is the duty of each and every responsible member of our Institute to select such leaders who will continue the good work carried out by our predecessors and who will uphold the traditions of our great Institute. Please select candidates based on their dedication, ability and commitment and not on their propaganda, personal interest and election campaign.

ICAI’s Corporate Forum and Achievers’ Awards

I had the opportunity to institute these awards which was an integral part of the mammoth event Corporate Forum when I was Chairman of CMII during 2007-08. I am pleased to inform you that the next event will be held from 29-31st January 2010. More details are available in this Journal and on the Institute’s website.

As I conclude my message, I appeal to all of you to resolve to achieve more and accomplish even more in this New Year. Let us be inspired and remember “Keep your dreams alive. Understand to achieve anything requires faith and belief in yourself, vision, hard work, determination, and dedication. Remember all things are possible for those who believe.”

My Pranaams to all,

CA. Uttam Prakash Agarwal New Delhi

Please Post Your Views Here

Announcement for panel for outsourcing of work of Technical Scrutiny of Balance Sheets

The Institute has received an Office Memorandum (OM) from the Ministry of Corporate Affairs. As per the OM, the Registrar of Companies will prepare a panel of professionals for Technical Scrutiny of Balance Sheets filled by the Companies for the State concerned.

The Scheme of outsourcing the work will be for the financial year 2009-10. The details of the Scheme specifying the eligibility criteria, mode of application, Procedure to be followed by the ROC for outsourcing of work, is provided in theOffice Memorandum issued by the Ministry

The Institute of Chartered Accountants of India while appreciating the initiative taken by the Ministry for ensuring good corporate governance and transparency for safeguarding the interest of the shareholders, creditors and the economy as a whole wishes to provide professional expertise of its members to the Registrar of Companies. For the purpose, it has been decided to send a panel of the members of the Institute to the Ministry.

Procedure for Registration for the empanelment:

The chartered accountants/firms which have already applied for the Multi-purpose panel for the year 2009-10 will be automatically empanelled for the subject empanelment. In case, they have not applied for the same, the following details may please be mailed at pdc@icai.in with the subject “Empanelment with the office of RoC”

i. Name of the Member

ii. Membership No.

iii. Professional Address

iv. Year of COP

v. Mobile No.

vi. E-mail id

For any further clarifications, the members may please contact Professional Development Directorate atpdc@icai.in or 30110440, 30110444, 30110480, 30110508 and 30110451.

Application invited for carrying out research - (15-10-2009)

ICAI Accounting Research Foundation (ARF) invites the Expression of Interest on proposed research project titled “COMPLIANCE ASPECTS OF THE FINANCIAL STATEMENTS OF CENTRAL AND STATE PUBLIC SECTOR UNDERTAKINGS”.

ICAI ARF has decided to carry out a research on the aforesaid topic jointly with Indian Institute of Corporate Affairs (IICA of the Ministry of Corporate Affairs, Government of India). The project would be of national importance in view of the fact that huge amount of money is invested in Public Sector Undertakings (PSUs) and the compliance aspects, particularly, the timely preparation of financial statements and audit thereof, would indicate the accountability of the managements of the PSUs to the general public.

The interested candidates may submit a brief synopsis, filled application form (available on the website of ICAI ARF i.e. www.icaiarf.org) along with a detailed Bio-Data outlining their experience in the research work in general and on the aforesaid topic in particular, addressed to Director-cum-Dean, ICAI ARF by E-mail at arf@icai.org or arf@icai.in.

CBI on trail of Satyam money

Read all our earlier articles on Satyam

The Central Bureau of Investigation (CBI), is heading abroad in its search for evidence of fund diversion at Satyam Computer by then- chairman B Ramalinga Raju. The agency is dispatching teams to the US, UK, Mauritius, Singapore, Belgium and British Virgin Islands, to record the statements of witnesses in the know of Raju's fund trail. It has already written letters to these countries and the institutions allegedly holding the accounts of Raju.

"We are forming special teams to travel to these countries to record the statements of the witnesses. We are waiting for the response to our letters. In any case, the witness examination in these countries should be over by this month end," a senior CBI official told DNA.

The CBI would file an additional chargesheet after recording the statements of witnesses in the six countries. "We will file the additional charge sheet shortly," said Laxminarayana, the CBI chief in Hyderabad, without specifying the time frame. The CBI is also looking at the reports submitted by other bodies, including the Icai, Sebi, Enforcement Directorate and the SFIO.

"The preliminary report of Icai provided enough information on the role of the auditors. The ED has in its possession, evidence on certain properties of the Raju family. Interestingly, there are also certain benami property holdings. The CBI is taking these evidences into account for proceeding further on the fund diversion," another source said.
The ED has attached about 280 properties of Raju and his immediate family members under the Prevention of Money Laundering Act. The value of the properties is estimated to be over Rs 1,200 crore.

The ED is currently looking at the links between over 300 private entities of the Raju family and the properties that have been attached.

Source - DNA

Mourning the sad and sudden demise of a very Senior Officer of the Institute

ICAI and its employees mourn the sad and sudden demise of Late K. Venkata Ramana, Additional Secretary (IT), who was spearheading the technological changes in the Institute for the last about seven years relentlessly and with great success.

Election 2009 - Announcement regarding Election Code of Conduct

8th October, 2009

ANNOUNCEMENT

As the members of the Institute are aware, the Election Code of Conduct has already come into force effective from 3rd September, 2009 which is required to be complied with by, not only the candidates contesting for the forthcoming elections, but also by their authorized representative(s), supporter(s), well-wisher(s) and the like. Besides, it is also the bounden duty of the members of the Institute at large to ensure that the Election Code of Conduct is not only adhered to but they do not become a party to any intended violation of the Election Code of Conduct framed by the Council of the Institute, directly or indirectly.

Apprehensions have been made about upcoming organization of parties and requesting the Institute to ensure that the Election Code of Conduct is adhered to. While the Institute would not spare any efforts in ensuring the adherence to Election Code of Conduct by all concerned, through this communication, I am however, requesting the membership at large to extend full cooperation and support.

(T. Karthikeyan) Secretary and Returning Officer

Satyam Report Action in 2 months

The government will announce action against four auditors of Price Waterhouse (PW), two offices of PW and executives of Satyam Computer Services, based on ICAI's Satyam report in two months, corporate affairs minister Salman Khurshid said on Tuesday.

The Institute of Chartered Accountants of India (ICAI) last month said that it has found S Gopalakrishnan, Srinivas Talluri, Shiva Prasad and CH Ravindranath of Price Waterhouse Bangalore guilty in the financial fraud. However, the institute did not provide details of any actions that it would take.

Khurshid said the action may include barring the auditors, but that action against the auditing firm PW could not be ascertained.

"Now, what is happening is that PW Kolkata and PW Bangalore are part of the PW overall, but we can not make them accountable on their partners' role in auditing Satyam's accounts, according to current regulations. ICAI has submitted its report on the role of auditors in the Satyam issue, and we are studying it, all I can say right now is that am not satisfied in the way auditors have performed their operations," Khurshid told DNA.

The government earlier hinted that to clear the surrogate auditing practiced by international audit firms, it may soon ease norms for them to operate and make them more accountable.

Under current norms, only audit firms registered with the ICAI are allowed to provide full-time audit services. International audit firms cannot operate directly and are only allowed to provide certain consultancy services.

As Price Waterhouse operates in India through their partners, the ministry or ICAI cannot take any legal action against the global entity. However, the ministry is working on guidelines under which all audit firms operating in India would be accountable foraction of the employees.

Meanwhile, the ministry is looking at incentives for private firms to go public. "That would provide them cheaper source of funding and their credit ratings would automatically improve as they become more accountable," said Khurshid, adding that incentives may include "some tax benefits".

Source - DNA

Certificate course on enterprise risk management - at Mumbai

(Last Date for Receiving Application is October 19, 2009) The Internal Audit Standards Board of the ICAI is pleased to offer Certificate Course on “Enterprise Risk Management” to enable members to develop competence in this emerging field and offer value added services. This course would help the members to understand the various issues relating to the enterprise risk management and in developing the necessary skills to provide value added services in this area. Course Objectives The overall objectives of the course are: To enhance the role of Chartered Accountants in the area of ERM. To build ERM as one of their core competencies. The main thrust of the course is to educate the participants on: Theory and concepts of ERM. Manner in which ERM is designed and implemented in practice. Current thinking on risk management and its impact on contemporary business enterprises Course Duration The total duration of the course is 200 hours spread over a 5 week/ 6 class room, divided as follows: Self Study : 100 hours Class room teaching : 50 hours E-Learning : 20 hours Case Study preparation and presentation : 30 hours CPE Hours The CPE credit of 100 Hours (50 hours of structured learning and 50 hours of unstructured learning )will be given to the participants. Course Fees Rs. 25,000/- per delegate only, payable online or by DD/ Pay- Order drawn in the favour of “The Secretary, ICAI” payable at Delhi. Further Details and Registration Form Link: Brochure of Certificate Course on Enterprise Risk Management Course Registration is on First-Come-First Served basis on receipt of duly filled-in and signed application along with course fee. Last date of Registration Form Receipt: October 19, 2009. Address for sending the Registration Form Receipt : CA. Jyoti Singh, Asst. Director Secretary, Internal Audit Standards Board The Institute of Chartered Accountants of India ICAI Bhawan A-94/4, Sector 58, NOIDA – 201 301 Locations Mumbai:October 24, 2009 (Venue will be announced shortly) Delhi: Successful Completion of First Batch of the Certificate Course on Enterprise Risk Management started in June, 2009 at New Delhi. Chennai/Kolkata :The date and venue will be announced and hosted on the website shortly. Hyderabad: Residential Course at Centre of Excellence, Financial District, Gacchibowli. Programme details residential course fee (including boarding and lodging expenses) and dates will be announced and hosted on the website shortly. Further Details and Assistance Course Co-ordinator: CA. Jyoti Singh Secretary, Internal Audit Standards Board Tel.: 0120-3054845/3054846 Email: cia@icai.org; auditing@icai.org Course Director: Shri Harish Dua Mob: 9871181181 E mail: h.dua@sigma-v.in

Contribution to the CPT

The Common Proficiency Test (CPT) is an entry level test meant for 10+2 students to the Chartered Accountancy Profession having multiple choice objective questions. The level of knowledge expected is basic knowledge with the objective to develop conceptual understanding of the subject concerned.

With a view to augment the Question Bank in the Subjects of Accounting/Mercantile Laws/General Economics/Quantitative Aptitude of Common Proficiency Test, it has been decided to invite questions from Chartered Accountants/Subject experts working in various Colleges/Universities/Public/Students pursuing Chartered Accountancy Course etc.

The contributor can contribute as many questions as he/she can, but in a lot of minimum of 50 questions in the subjects of Accounting/Mercantile Laws/General Economics/Quantitative Aptitude in the following manner:-

• The questions should be of objective with four probable answers for each question. The correct answer for each question is also required to be given.
  
  
• Fill in the blanks having four alternative answers.
  
  
• Small paragraph containing two to three lines followed by a question having four alternative answers.
  
  
• Numerical having four alternative answers (in Fundamentals of Accounting, Mathematics and Statistics).
  
  
• Simply worded Case studies involving multiple concepts be also prepared. The case study could be something like a practical situation described in 3-4 lines in simple language with application of single/multiple concepts and requiring students to choose one answer from amongst four answers whereby the analytical/logical ability and intelligence of the students is tested.
  
  

Since the CPT is an entry level Test meant for 10+2 students, the level of knowledge expected is basic knowledge and the questions should be aimed at testing the conceptual understanding and fundamentals of the subject than merely testing the memory of candidates. The difficulty level of the questions should be of 10+2 level and capable of being answered/solved in less than one minute.

While framing the questions, the questions be framed in such a manner that each one of the four answers given for a particular question, per se, appear to be the right answer thereby requiring the candidate to use his analytical ability to find the correct answer.

• The language of the questions to be sent should be English only and is clear, correct, unambiguous and free from any doubt. The language conveys the same meaning as was intended by you.
  
  
• The copyrights of the questions so submitted shall vest with the Council of the Institute. The contributor of the questions shall ensure that the questions so submitted to the Institute are not parted with by him/her to any other Body/Person and shall be meant only for the exclusive use by the Council of the Institute.
  
  
• It may please be noted that the questions framed by you should be original and not already published in some books or journals or study material of the Institute or reference/text books available in the market or also from question papers of any other examinations or material distributed by any coaching institution. The requirement is the questions that are original and framed with the meticulous care and genuinely.
  
  
• For each question framed and forwarded and accepted by the Council of the Institute for augmentation of the Question Bank of CPT, Rs.100/- per question selected/accepted will be paid as honorarium. In addition to honorarium payable towards questions selected, Rs.100/- (fixed) will be paid for other services also. The questions may be sent in a sealed envelope superscribed “Question Bank – CPT” to Shri G. Somasekhar, Additional Secretary (Exams.), The Institute of Chartered Accountants of India, Indraprastha Marg, New Delhi – 110002 by name or by e-mail to somasekhar@icai.in . While sending the questions by post/mail, please mention your name and complete postal address alongwith contact details including mobile number. All correspondence on the subject should be treated as secret.
  
  

Interested persons may kindly contribute to the Question Bank of CPT.

(G. SOMASEKHAR)
ADDITONAL SECRETARY (EXAMS.)

ICAI President's message dated Oct 1, 09

Dear CA Pariwar,

It’s festival time. By the time you receive this Journal, Eid-ul-Fitr, Dussehra and Navratra will have been celebrated and preparations for Diwali will be in full swing. Each and every Indian festival has a deep meaning attached to it. Dussehra, as we know is the triumph of good over evil, not just on the surface but within the heart of each and every human being. Diwali is known as the festival of light and the lighting of the lamps signifies awareness of our inner light that removes the darkness of ignorance and illuminates the way to true knowledge. We are indeed blessed to be a citizen of such a culturally rich country like India.

International Developments

As you are aware, ICAI had signed an MoU with the Institute of Chartered Accountantsin England and Wales (ICAEW). I am pleased to inform you that the first results after the signing of the MoU have been declared and four of our members have passed the modules, bringing glory to the Institute. I am sure that more of our members will want to spread their wings internationally and will appear for these examinations in future.

I am happy to inform you that to reinforce the ties between our two Institutes, the Lord Mayor of the City of London, Mr. Ian Lauder (FCA), will be coming to India to visit our Institute. In honour of his visit to the Institute we have organised a number of activities such as meetings with various regulators at Mumbai and New Delhi and a joint seminar with ICAEW on the theme ‘A New Vision for Financial Services’. This would pave the way for a long and mutually beneficial relationship between the two premieraccounting institutes in the world. The seminar will explore the implications of recent experiences of financial services and the businesses they service and will attempt to develop a vision for the future of a global financial architecture that will restore confidence in the financial services. Besides myself, the seminar will be attended by dignitaries of eminence like Mr. Ian Lauder (FCA), the Lord Mayor of the City of London, Mr. Martin Hagen (FCA), President of the ICAEW and Ms. Naina Lal Kidwai, Group General Manager and Country Head HSBC India, among others. Our chartered accountant brothers and sisters from the industry, who are top CEOs, CFOs and COOs, have also been invited to attend the round table conference to better understand the scope of professional opportunities in the United Kingdom.

As part of the seminar, there will also be panel discussions to develop a vision for the future of financial services with more effectively co-ordinated and co-operative regulation, incorporating more transparent and sustainable corporate governance structures within companies. I am sure that hosting a conference of this magnitude will not only forge stronger ties but also pave the way for greater interaction between our respective organisations.

ICAI International Delegation to Australia 2009

The Institute is growing fast, almost exponentially day by day. We have signed MoUs with two Australian organisations, the Certified Practicing Accountants Australia (CPA Australia) as well as with the Institute of Chartered Accountants of Australia (ICAA), but that is just the tip of the iceberg. To get a better understanding of the opportunities and how to translate them into concrete action benefiting our members, the Institute is forming a delegation to tour selected cities in Australia on self financing basis. This visit will be hosted by the ICAI’s Sydney Chapter.

This tour will help promote a better understanding between the delegates and firms of the two countries and will help in actually understanding what kind of opportunities exist for our members there. The economic and regulatory environment specific to Australia will also be studied during the tour. There will be regular interactions and discussions with members and organisations native to Australia to build a complete picture for us. Our delegates will observe the way Australian officials operate thus having a better understanding of how to aid business between the two nations. No doubt, direct networking between members and companies will help strengthen business ties. By keeping the above agenda clear we will get an insight into planning and arranging future requirements for the Institute as well as for our members.

Registrar of Companies: Outsourcing of Work

Opportunities come to those who persevere. The quality of our work is of a caliber that has impressed the Registrar of Companies (ROC). They have decided to outsource the technical scrutiny of balance sheets filed with them under the Companies Act, 1956 to professionals like us. This outsourcing will be for FY 2009-10 with future outsourcing under review after assessing the outcome and impact. Further details in this regard are available on our website www.icai.org

This is one more new professional opportunity for our members. This task has been entrusted with us keeping in mind the high level of integrity, confidentiality and commitment to timelines our profession attaches. I am confident that our professionalbrothers and sisters will rise to the occasion and take up this new opportunity with great enthusiasm.

Special Audit under Section 14A and Section 14AA of Central Excise Act, 1944

The Chief Commissioner of Excise along with various Excise Officers recently held discussions with us to better understand how to conduct audit and various other modules concerning Special Audit under Section 14A for computing value of goods and under Section 14AA for verifying proper utilization of credit under Central Excise Act and Rules. These discussions were fruitful as they led to a clear direction and understanding of the scope of these new audits.

To make sure that we are best prepared to utilize this opportunity, the Institute is coming out with an insightful and comprehensive new Excise Audit Manual. This Manual will go a long way in improving our skill sets and empowering us with the knowledge required to benefit from this new professional opportunity.

Welcome to New Secretary, MCA

I wish to inform you that Shri R. Bandyopadhyay has taken charge as new Secretary to the Ministry of Corporate Affairs (MCA). Before joining the MCA he has served as Secretary, Department of Public Enterprises, Special Secretary, Department of Telecommunications and Senior Advisor in the Planning commission, and has many remarkable contributions to his credit. I, on behalf of entire CA Parivar, extend hearty welcome to the new Secretary, MCA and assure him all out support of ICAI. At the same time, we should not forget the commendable work done by outgoing Secretary, MCA Shri Anurag Goel. Successful implementation of dream MCA 21 project, enumerating roadmap for the LLP in India and work done for simplification of Companies Act are some of the biggest achievements of his tenure. He always lent full support to the Institute at every fora and truly guided us as mentor. We had organized a farewell for the Shri Goel during the recently held Council meeting.

IRDA Workshops

The Insurance Regulatory and Development Authority (IRDA) is a regulatory body to govern the insurance and re-insurance business in India. Our Institute enjoys a cordial relationship with the IRDA due to the fact that we have always responded to the needs of the insurance sector with great swiftness. Proof of this lies in the fact that when the insurance sector was opened up to private players in 2001 we immediately constituted the Committee on Insurance and Pension (CoIP) to assist in the development of the insurance industry in India.

With the new regulations expounded by the IRDA that insurance firms must have systems and transactions audited on a regular basis by CAs or CA firms, our Institute has been quick to welcome the opportunity created for our members and decided to provide a support system to the members by organising Joint Workshops on Internal/Concurrent Audit of Investment Functions of Insurance Companies jointly with IRDA. These workshops aim to give our members the technical know-how necessary to perfectly carry out the audits required by law.

We are doing everything in our power to ensure that our members can take advantage of this new sector which has been opened to us. The growth opportunities in this new sector are immense and since insurance industry experts would be addressing the technical sessions in these workshops, I request our members to take full advantage of these special workshops by attending them and adding to their growing portfolio of services. At the end of the day we will be doing a great service to millions of our countrymen who have invested their hard-earned money in these companies by ensuring that systematic, transparent and compliant measures are constantly implemented, making the insurance companies strong and more viable.

Goods and Services Tax 2010

This new consolidated Tax is on the anvil and will be implemented soon. As our members are aware, this announcement was made by the Empowered Committee of State Finance Ministers who had accepted the recommendation of the Working Group that had been set up to outline the dual GST which will have a Federal part and a State part. In order to bring about the consolidation of GST and then implement it by 2010 we have held a number of meetings with the Department.

Shri R. Sekhar, Commissioner of Customs, Pune who is also the Government nominee in the Council, has been working in conjunction with ICAI to hold joint workshops in all the five Regions wherein our members from industry and practice along with industry experts could hold discussions with the Department so as to prepare a clear pathway for the convergence and present its views to the Government. These joint workshops of the Customs and Central Excise Departments and the Institute would focus on issues that may arise out of the convergence of taxes for the GST and aim at coming up with solutions to any future questions. Members are welcome to provide their valuable feedback and suggestions on gst@icai.org in this regard.

RBI Bank Empanelment

We have always expressed our reservations in respect of the autonomy granted by RBI to Public Sector Banks (PSBs) with regard to the appointment of its auditors. We had requested the RBI to provide us with the list of auditors for the audit of PSBs. We not only did not receive the list but were surprised to know that appointments were finalised by the PSBs in just two days. We are aware that due diligence compliance cannot be carried out in so short a time. To protect the interest of the common man and to maintain required levels of compliance we have placed our recommendations before the Ministry of Finance. We have stressed that the optimum method would be the original system where only RBI would have the authority to appoint Central Statutory Auditors. We hope that our recommendations are looked into for the betterment of investors across the country.

Constitution of Industry-Specific Groups

Our membership strength has grown at a rapid pace during recent years. Moreover, a large number of members are opting to serve in industry. As such there is need to continuously update this part of fraternity about the changes taking place in various statutes, share the knowledge of various new techniques and sharpen their skills on various professional matters. With this objective, we have decided to form industry-specific groups comprising our members in which issues like IFRS, Direct Taxes Code, Companies Bill, Various issues in GST and other industry-specific issues will be discussed.

Besides, it will also provide a good platform to them for improving networking among themselves.

We have also decided to form groups of members who are CEOs, CFOs and COOs in the industry to compile industry-wise Guidance Notes which would cover industryspecific compliance issues. Our members in industry who are at the helm of affairs have gained considerable experience and insight in complying with various laws and regulations which are peculiar to their specific industries. By sharing their knowledge and experience in compiling these industry specific Guidance Notes our other members and students will get a clear insight into compliance with various laws and regulations industry-wise at a pan India level.

Elections

The time is approaching for all our members to exercise their mandate and vote in the forthcoming elections. As we show our loyalty to our country by voting in the local and general elections, in the same way your loyalty to the Institute lies in the casting of your valuable vote.

The parallels are the same while voting for our country as well as our Institute. In both cases the selection of the right candidate is crucial to governance and progress. As you would want to select the most appropriate candidate for your city and state, in the same manner I exhort you to select the best candidate for your Institute. Select candidates who will be instrumental in building the future of the Institute and our profession. Vote for selfless workers of great integrity and strength who also possess the expertise to take the Institute and all its members to new levels of professionalism and growth.

I would like to mention at this juncture that this year the Election Code of Conduct will be enforced very strictly. No divergence from the Election Code will be tolerated or accepted. If any member finds that the Code of Conduct is not adhered to, please bring this breach to our notice immediately. We will ensure that the elections are conducted smoothly and are held in a free and fair manner. I appeal to all of you to cast vote, and cast it wisely.

Respect For the Profession

It has recently come to our notice that few organisations do not accord the respect due to our profession in the correct perspective. A recent BSNL recruitment tender stated “Supply of Chartered Accountant for maintaining accounts of USOF Phase-1 Project”. We have sent a strong letter of protest to BSNL stating that we provide services to society in a professional and social capacity and cannot be looked upon as a commodity. We have demanded a complete withdrawal of the tender documents with the derogatory expression and to reissue new documents with the necessary changes. Rest assured, we will pursue this matter and ensure that the profession is given the respect that it deserves.

Revision / Updation of Various Regulatory Forms

Some of the regulatory forms like form 2, 3, 6, and 18 needed re-orientation so as to be contemporary in the context of language and information sought from the members through these forms. These forms have since been revised and will take some time before you start using them as these forms are part of the Regulations and require approval of the Central Government.

Infrastructure Development

Maintaining the growth curve in the development of infrastructure that we have embarked upon, I am pleased to inform you that we are constructing buildings of the branches in Jammu & Kashmir and Sangrur in the North, Beawar and Ajmer in the West and Alleppey and Quilon in the South. At this pace I am sure that in a few months time we will create history by having a fully-developed branch in every state, city and town of India. Let us, as a team, move ahead and make this dream a reality.

Members Feedback

In another section of this journal I have compiled a report of the various major activities that have been carried out by me and my colleagues in the Council over the last few months. I sincerely hope that you have been part of these activities and have given your positive input for and during these initiatives. It is in actuality, your participation and input which raise the brand value of the institute and elevates it to new levels.

We would appreciate your honest feedback to the various initiatives and suggestions for upcoming projects. Our member base is so talented and vast that just on the basis of your feedback and ideas we can be inspired to launch new initiatives that will take our Institute to greater heights of glory.

I welcome your ideas and feedback. Mail your feedback to me personally and I promise that each input will be looked into and implemented according to its relevance and practicality.

LLP Act

The LLP Act has been passed, but to be fully effective and operational, several other factors have to be determined first. To that end, the necessary changes in the Chartered Accountants Act, 1949 are under consideration of the Ministry. Once the Ministry passes the recommended changes, we will move ahead to implement the changes required in the procedural guidelines and regulations by the ICAI.

What I would like to emphasize at this juncture are the multitude of positive effects that will accrue to the profession once the LLP Act is fully operational.

The most obvious step would be changing from traditional partnerships to LLP for the limited liability as well as to become an independent and legal body with no cap on increasing the number of partners once the minimum limit has been satisfied. More importantly, as the LLP is an internationally recognised business entity – unlike our traditional partnerships- members will be able to operate on a global platform.

Since the LLP is covered by a comprehensive regulatory regime, work quality and efficiency is ensured which will bring our companies to international levels of service provided. All these factors play a crucial role in providing Indian CA professionals the benefits of dual advantages of limited liability combined with global recognition. As you can see, the LLP Act will provide the necessary impetus to the overall growth of the profession.

Better Service Through Our Decentralised Offices

With the growing membership, there is need to provide services at much desired faster pace. Taking a big step in this direction, we have strengthened the branch infrastructure during the recent months. Moving a step further, I have instructed all our Regional Offices to shift the relevant records and documents to the various decentralized offices namely Ahmedabad, Bangalore, Hyderabad, Jaipur, Pune, Nagpur, Surat, Vadodara, Coimbatore, Ernakulam, Indore, Chandigarh and Thane so as to minimize the response time. The deadline for the effective transfer of records and documents to the decentralized office is October 31, 2009. I am sure that with this move, we will be able to provide more timely service to our members and students.

Accounting Technician

The Regulations now provide exit route for such students who could not complete the Chartered Accountancy course in its entirety. Such students who have passed Intermediate/ PE-II/PCE and completed the prescribed period of articleship can opt to apply for issue of Accounting Technician Certificate without any further conditions/fee while continuing to be eligible to appear in the Final Examination. You may like to bring such a development to the notice of such eligible students.

Students Exams

Next Chartered Accountancy exams are approaching fast in November. Being the principles it’s our duty to see that the practical experience gained by the articled assistant(s) during their practical training is applied suitably in understanding the theoretical part. This will surely improve their performance in the exams. As such, We should come forward, devote some time to our article assistant and ensure maximum utilization of experience gained during their training period. I am sure, that systematic approach combined with determination, zeal and your support will see your articled assistant through with flying colours. My Best Wishes to all the students who are taking the exams in November.

Audit Season Coming to an End

In the last month, many of my professional brothers and sisters must have been on their toes to complete their tax audit assignments and file returns with due diligence and care. The next task is to ensure that all documentation work is also completed as we have a Peer Review system in place. I amsure now all of you will be able to spend time with your loved ones during the coming festive season.

We should always remember the words of Swami Vivekananda who said, “Don’t look back — forward, infinite energy, infinite enthusiasm, infinite daring, and infinite patience—then alone can great deeds be accomplished.”

As I conclude my message, I, on behalf of entire CA Parivar, pay rich tributes to late Andhra Pradesh Chief Minister Y. S. Rajasekhara Reddy, who recently died in a helicopter crash. His untimely death is a great to loss to the CA Parivar as well because he had always been forthcoming in supporting our Institute, CA Profession and professionals. He had been the Chief Guest at the 41 Regional SIRC th Conference held at Hyderabad on 29 August 2009. In my view the best tribute to the departed leader would be to imbibe and inculcate his dynamism, inclusive & progressive vision and the spirit of selfless service in our profession.

I wish all the members of the CA Parivar from the bottom of my heart ‘A Happy Diwali and a Prosperous New Year’ on behalf of all Council Members and the entire staff of the Institute of the Chartered Accountants of India.

My pranaams to all,
CA. Uttam Prakash Agarwal
New Delhi