Dear Professional Colleagues,
I am happy to share with you some significant developments concerning profession and important decisions taken by the Council at its 342nd meeting held on 15th, 16th April 2015 and on 4th and 5th May 2015 after adjournment.
Meeting with Shri Arun Jaitley, Hon’ble Minister of Finance.
A meeting was called by Ministry of Finance on 24th April, 2015 to discuss new ITR forms. It was chaired by Shri Arun Jaitley Hon’ble Minister of Finance. We shared our concerns and the challenges in the new forms with the Minister. We have also emphasized the need for a simplified single page return form which was appreciated by him.
Meeting with RBI Governor
I am happy to share with you that we met Dr. Raghuram Rajan, Governor RBI in his office in Mumbai on 28th April, 2015 to discuss in detail some of the important issues concerning our profession. Following points were broadly discussed:
- Issues involved in the new system of Appointment of Statutory Central Auditors (SCAs) of Public Sector Banks.
- Appointment of Statutory Branch Auditors (SBAs) of Public Sector Banks.
- Increase in the Audit Coverage of Branches of Public Sector Banks under Statutory Audit.
- Internal Audit related work of Banks to be outsourced to Chartered Accountants.
National Financial Reporting Authority (NFRA)
The Parliamentary Standing Committee on Finance (2014-15) stated in its 13th report that it would like the NFRA to function as an oversight body without any jurisdictional conflict or overlap. It has desired that this aspect may be addressed, when the rules governing NFRA are finalized by the Ministry. The report is hosted on the website at: http://164.100.47.134/
New Standards and Guidance Notes
The recent years have witnessed rapid changes in the business and economic environment. The economic upheavals, rise in cross border movement of business and increased expectations of stakeholders have necessitated changes in the existing or bring out new standards and guidance notes. The council has approved a number of drafts as a step to firm up existing framework.
- Accounting Standard for Local Bodies (ASLB) 31, ‘Intangible Assets’ based on corresponding IPSAS 31.
- Accounting Standard for Local Bodies (ASLB) on ‘Financial Reporting under the Cash Basis of Accounting’ corresponding to IPSAS on ‘Financial Reporting under the Cash Basis of Accounting’.
- Accounting Standard for Local Bodies (ASLB) 3, ‘Accounting Policies, Changes in Accounting Estimates and Errors’ corresponding to IPSAS 3 on ‘Accounting Policies, Changes in Accounting Estimates and Errors’.
- Accounting Standard for Local Bodies (ASLB) 19, ‘Provisions, Contingent Liabilities and Contingent Assets’ corresponding to IPSAS 19, ‘Provisions, Contingent Liabilities and Contingent Assets’.
- Guidance Note on Accounting for Derivative Contracts to be effective from 1.4.2016. It was decided that members will be encouraged to follow from even earlier period.
- Guidelines for Valuation norms for Intangible Assets under Rule 23 of the LLP Rules, 2009.
- Guidance Note on Reporting Under Section 143(3)(f) and (h) of the Companies Act, 2013.
- Illustrative formats of the auditor’s report on consolidated financial statements of a company under the Companies Act 2013.
Election reforms
To ensure fair and transparent elections to the central and regional councils an Electoral Reforms Group was formed. The Council considered its Report and decided that:
- Set up of polling booth in chapters abroad having more than 500 voters, subject to feasibility and permission to be obtained from MCA and MEA/MHA.
- Ballot papers will include membership no. of candidate along with photograph.
- Polling Officers will be given clear instructions as to which documents to be verified for identification of voter.
- Efforts will be made for display cast of votes through website every two hours.
- Host draft list of voters and seek voters to point out errors, if any.
- Possibility of getting confirmation from postal voters that they have posted their vote shall also be explored.
Quality Review Board References
Under the Chartered Accountants Act, 1949, consequent to the Chartered Accountants (Amendment) Act, 2006, the Central Government has constituted a Quality Review Board. In the recent meeting the council disposed off 10 references received from the Quality Review Board containing recommendations to the Council under clause (a) of Section 28B of the Chartered Accountants Act, 1949.
Concurrent Audit Limits
It is our endeavour to strengthen policies and procedures that enable members to render quality services. In a separate manner, the Council decided to fix limit on concurrent audit of banks at 4 audits per member per year. Cooperative banks and RRBs were exempted from the limit. The above limit will come into effect from 1.1.2016. These limits are carefully kept to enable members to devote more time thereby improving the quality of work.
Global Exhibition on Services
As a partner in Nation building the ICAI through its technical committee viz. the Committee on Economic, Commercial Laws & WTO participated at the Global Exhibition on Services (GES) 2015, April 23-25, 2015 in New Delhi. It was the unique initiative of the Ministry of Commerce, Government of India to promote export of Services from India and to provide a platform to enhance strategic cooperation and develop synergies between players of the services sector in India with their Global counterpart. There was participation from more than 35 Countries with 400 Exhibitors.
ICAI Examinations
The present round of ICAI examinations started on 2nd May. It is a mammoth task that involves close coordination and supervision. I am sure the students who have put in right efforts would manage good marks. Passing examinations is not as difficult as perceived by some.
Examinees may also have diverse opinion on the question paper. In case you find question papers to be unduly lengthy or you feel that questions are incorrect or beyond syllabus, then you must write to us at examfeedback@icai.in so as to reach us not later than one week from the date of the last examination, i.e. 25th May 2015. I assure that each mail would be properly considered so that no injustice is done.
Convocations
At ICAI, convocations are organized twice each year at various metros/cities in order to confer the newly qualified Chartered Accountants with their membership certificates. Students get their membership certificate declaring them as Chartered Accountants – a degree allowing them to either go in for practice or serve the industry. In continuation with the practice we are in the process of organizing the first round of Convocations at various metros/cities – Ahmedabad, Mumbai, Chennai, Pune, Jaipur, Hyderabad, Kolkata, New Delhi and Kanpur during the months of May to July.
These are some of the recent important developments which I wanted to share with you. I assure you, the Council is committed to work in the best interest of the profession.
With Best Wishes,
CA. Manoj Fadnis, President
May 14, 2015, New Delhi
Source- Email from ICAI President
It’s really a critical issue of Lengthy Question Papers.
Especially Accounts was damn lengthy.
Please take some incentives for it.
Before considering any Question Paper, please once see that is it worth for 3 hours.
And can students really afford to solve 100 marks Question Paper.
ICAI’s resolution for four concurrent audits per member must be opposed ,because this has been passed to benefit bigger firms or fake partnership firms. Concurrent audit should be equally distributed with out distinguishing between partnership and proprietorship firms. Of course, experience can be one of the crematoria but attending to Concurrent audit course should not be mandatory at this stage since ICAI is not able to ensure conduction of course in each of the district or nearby centres. Statutory audit and concurrent audit should be allotted by any central Agency, not by concerned bank.Our Central council members have not been able to sell the idea before the Government/RBI regarding maintenance of independence of Profession.I am at loss to say that because of weak members in Central Council, the dignity of profession has come down. CS and CMA are paving their ways in CA’s fields.
Agree with CA. M. Lakshmanan. Institute should adopt policy for automatic increase in fee. to audit areas like ” Concurrent audit. Yearly internal audit by another CA besides Statutory audit. The step is countermanded by no limit on Cooperative/ RRBs. So it should be 8 including Cooperative/ RRBs. Stock audit, FOREX audit and so many area of specialization, Institute should adopt policy for certification, period of practice & proper payments. As a policy of green mission, Only soft copies should be submitted as digital signaturesare there. All NGOs/ Societies/ Trust should put up results duly audited. Fee may be left to be compromised as it may be small or large.
Restriction on conducting the concurrent audit on per member by ICAI is more appreciable but sir there May be some issues in term member because concurrent audit is systematic periodical audit of banks & there is quite possible that all members in firm are not in practice and not hold COP or no practical experience hence in such case benefit of this may be taken by another partner. I think it is loophole of this.
the institute should fix up the limits for audit of charitable trusts as after introduction of csr the activities of charitable trust will increase beyond the imagination
Limit of 4 concurrent audits per member is not practical. It is fixed to give benefit to the firms of Professional Leaders. The firms, who are having more members (Paper partners only in most of the cases) will get more audits irrespective of their capability to handle the work. Concurrent Audit is not a easy job. While fixing the limit one more rider must be imposed that the member, who has completed “CONCURRENT AUDIT CERTIFICATE COURSE” shall only be eligible to get and carry out the concurrent audit work.
Banks are imposing such conditions to allot concurrent audits (Some are enumerated below for reference) to restrict most of the Chartered Accountants from getting the concurrent audit work.
1. Minimum experience of conducting Concurrent Audit – Whether a CA can’t do the audit if he/she does not having any experience of that. It means a CA can not do any professional work unless and untill he is having experience. It shows that having a CA degree is not sufficient to carry out Audits.
2. Minimum number of Partners – Why minimum number is required? Whether a proprietor can’t do the audit. And at the same time, ICAI is fixing the limit per member. Is it not a method of extending undue benefit to the firms of our leaders and so called big firms. If the limit is fixed, it should be based per firm and category wise, as considered for Statutory Branch Audit. Besides this maximum number of audit per firm should also be fixed.
3. ISA / DISA
4. Location of the Practice Firm etc.
Our ICAI in consultation with RBI should prescribe standard forms for uniform reporting and fees as the fees now paid by many banks are very low for the work we do. Certain Banks pay the same for nearly 10 years. It should also be standardized. After appointment and acceptance for the same fees the banks are adding new areas new certificates now and then and the volume work and responsibility coupled with risk increases without any corresponding increase in fees. Further the report, which runs to minimum 40 pages and four copies makes our work very tedious. I do not understand why the banks are reluctant to switch over to accept soft copies with digital signature. Let us hope that the situations will improve in the near future by the timely action taken by our elected representatives in our Institute as well as in Parliament.
All the efforts made the ICAI is appreciable , but in respect to allotment of Bank Branch Audit and Allotment of Statutory Central Audit of Banks need to be monitored by ICAI, only meeting and lectures will not serve Members interest, knowing fully Mr. President of ICAI will not be in her office after Feb2016. Hence we have to hear his lectures and Photographs in Journal and various web-sites including in the ICAI – Journal ( The Chartered Accountants )
As per the information / norms in respect to allotment of Branch statutory audit , members firm are to be rested Two years after doing branch audit of a particular Bank of Four years , But it is not followed at all , even after rested three/ four years the members firm are not getting audit. In my case Firm Registration no 322421 E. Unique code no 340378, MEF application No 09341 we did last bank branch audit in the year 2010-2011. ( four years ) , then cooling period was 2011-2012.and 2012-2013.
But not get bank branch audit for the year 2014-2015. thus cooling periods was four years ( 2011-2012,2012-13,2013-2014 and 2014-2015 ) Instances are many. Even the matter brought to the Notice to the present president of ICAI , Professional Development Committee and others in the month of March 2015. answer received that Names of ” non- continuing auditors have been send to RBI . But not received any branch audit , why? Reasons are open secret , Council members including president of ICAI are interested to meet with the Regulators . Why representation made by members to ” Save certification right “headed by CA. Vivek Khurana ( Founder of CASANSSAR.COM ) to CA Raghu the immediate Past president and Present President of ICAI, not considered by the authority. What action taken by the ICAI , only delivering lectures in press ” RED FLAG on PSBs by ICAI ”
We need active representations , we are accustomed to see the performance of ICAI in the recent Past years. I am in continuous profession since 1970 that is more than 43 years , have the opportunity to see the performances of our leaders . Why this year audit allotment was so delayed ? why so many consents given by the firms to undertake audit, what action taken by our respected leaders .CA. Fadnis will no more in the council after February 2016. But ICAI will remain . NEED GOOD REPRESENTATIVE to run ICAI. PEER REVIEW failed ! only pursuing to take courses like ” Concurrent audit. Stock audit, forex audit and so many ? why are we not fit for certifying financial statements ? Why Building scams in ICAI as reported in Tax guru and other web sites ? What action taken by ICAI . Scams are from past years . Why RBI and Other regulators have no faith on us ? Doing maximum numbers of audit, Tax audit etc. but not doing proper audit by members , then why ICAI are not taking actions against members ?
WE NEED PROPER REPRESENTATIVES both in the CENTRAL COUNCIL and REGIONAL COUNCILS from the year 2016 onwards and their terms should not be more than three years , they should not be eligible for reelection after Three years .
Limit of concurrent audit should also be based. On transactions and geographicall area where the bank and member is situated