My dear Professional Colleagues,
In the preface to the first edition of the Code of Ethics of ICAI, the then ICAI President Dr. R. C. Cooper had noted: No booklet of this nature can achieve the object of outlining every possible act which may or may not constitute sound ethical conduct because the practice of professional ethics is largely a matter of conscience and the determination of members to distinguish between what is right and wrong. Ethics provides an understanding to differentiate between our right to do and what is right to do. Very rightly, the Institute urges its members to search their hearts and conscience whenever in doubt, and thereby assist towards the maintenance of high principles of professional conduct, as is expected of the constitution of a regulated profession.
In the past, we have witnessed that organisations have sustained and prospered, whenever they opted to put ethics at the top of their strategic priorities. It is not surprising that the curve of ICAI’s behemoth stature has constantly grown. Over the years, ICAI members and firms have regarded ethics as a redeeming virtue and acted above themselves for the cause of society. Very interestingly, Albert Schweitzer equates ethics with reverence for life. He records: The first step in the evolution of ethics is a sense of solidarity with other human beings. ICAI has been committed to its stakeholders, connecting closely with them, working for them and adding the elements of fiscal probity in whatever the profession does.
As you know, legal framework of insolvency is emerging and the domain of insolvency is already a new horizon of opportunities for professionals. Bound by their commitment to serve the nation, CA professionals have started showing keen interest in exploring this field. Having competence in accountancy and financial interpretation, and a penchant for statutory and legal compliances, they have an edge in carrying out the insolvency operations effectively. Rightly so, the theme of this issue of the Journal is ‘Insolvency’.
Now let me brief on some of the significant professional developments that have taken place in the last one month:
As part of our strategic priority, we at ICAI have been engaged in taking the Indian polity on board to put our viewpoints and concerns across to them. Following are some important headways made in this regard:
As you are aware, forging global professional partnership and increasing Indian accounting profession’s role in global standard-setting processes are on the top of our agenda. Towards that, ICAI recently organised the IFASS (International Forum of Accounting Standard- Setting) Meeting in Mumbai. IASB Vice-Chair Ms. Sue Lloyd and IFASS Chair Ms. Liesel Knorr along with the representatives from more than 25 countries and various other accounting bodies across the globe participated in the meeting. IFRS Foundation Trustee and former Comptroller and Auditor General of India Shri Vinod Rai as Chief Guest inaugurated the Meeting. Speaking on critical role played by the accounting and auditing profession in certifying the truth and fairness of financial information, Shri Rai stressed on the need to meet the expectation gap of stakeholders at large. In the two-day meeting, various relevant issues, including the consolidation of CSR trusts and accounting for business combinations under common control, were discussed. A report on this meeting is published elsewhere in this Journal.
On the sidelines, ICAI organised a series of interactive meetings and seminars bringing the Indian and international accounting/auditing regulators together.
Interaction of IASB official with National Regulators was organised on 10th April 2018. IFRS 17 (Ind AS 117, Insurance Contracts) Insurance Industry Outreach, and informal AOSSG meeting and ICAI–IASB Joint Stakeholders’ Seminar on IFRS 9 (Ind AS 109) ECL Model Challenges in Banking Industry were organised on 11th April 2018.
I am happy to inform you that in yet another success in our drive for global professional alliance, the Chartered Accountants Australia & New Zealand (CA ANZ), through its Pilot International Pathway Programme, has made a unilateral offer of their membership to our members based in Australia and New Zealand. Under the programme, our members shall have to complete a 40-hour self-study programme and attend a two-day workshop. Then at the workshop, they will be evaluated through oral and written assessment tests. Interested members may check https://resource.cdn.icai.org/49849icai-ia39512.pdf for details.
Issuance of New Revenue Standard Ind AS 115
You will be happy to note that ICAI’s well-acknowledged status as standard-setter par excellence has recently got a further boost. A new Ind AS in the area of revenue recognition was notified by the MCA that has been formulated based on the recommendations made by ICAI. Key amendments are issuance of new revenue standard Ind AS 115 and withdrawal of existing revenue standards and related guidance. The new Standard, mandatorily effective for the accounting period beginning on or after 1st April 2018, is based on the IFRS 15 Revenue for Contracts with Customers. It will bring in a comprehensive and robust framework (i.e. 5 step model) for the recognition, measurement and disclosure of revenue. Ind AS 115 will improve the comparability of revenue across entities, industries, global capital markets, etc., and bring in clarity in the areas such as multiple element contracts/ bundled products, licensing, royalties for intellectual properties, financing components and variable consideration. Accounting Standards Board (ASB) of ICAI has taken up the task of upgrading the existing Accounting Standards, which is scheduled to be implemented after 1st April 2020. In its meeting held recently, ASB of ICAI has deliberated extensively on the exposure draft of the new standard in financial instruments for SME, which will be issued shortly for public comments.
It has been our foremost goal to work closely with the global accounting bodies for the benefit of Indian accountancy profession. In that spirit, recently, ICAI and CPA Australia jointly organised a series of workshops in New Delhi, Mumbai, Chennai and Bengaluru. The objective of the workshops was to provide an overview of IFRS 15 Revenue from Contracts with Customers, IFRS 16 Leases, and a few more new Accounting Standards. Let me also inform that ICAI has issued Educational Material on Indian Accounting Standard (Ind AS) 103, Business Combinations, capturing all recent amendments in the Ind AS and providing guidance in recognising the business combinations by acquisitions/mergers and combination of entities or businesses under common control.
As you know, valuation is being considered as one of the most critical areas of finance and business today. It also plays a key role in the insolvency regulation regime. Rightly so, ICAI had constituted Valuation Standards Board (VSB) in the year 2017-18 to focus on the release of Indian valuation standards, providing interpretations, guidance and technical materials, and implementation of the standards. I am happy to inform that, to standardise the principles, practices and procedures followed by registered valuers/valuation professionals in valuation of assets and liabilities, VSB of ICAI has formulated 8 draft Indian Valuation Standards. These have been developed along with Preface and Framework for the Preparation of Valuation Report in accordance with the Indian Valuation Standards. To ensure transparency, objectivity, independence and greater public participation, the exposure drafts, so formulated, have been hosted at https://www.icai.org/new_post.html?post_id=14681&c_id=240 for public comments with the deadline of 12th May 2018.
I am pleased to inform that High Power Group constituted by ICAI to study the systemic issues in the PNB (Punjab National Bank) fraud matter has submitted its report to the MCA. Accordingly, representations are also being made to other regulatory agencies. The Group so far has had three meetings. Having collected relevant information from the officials of PNB including its Audit Committee Chairman, the Group prepared the report identifying the loopholes in the PNB systems and systemic issues in the bank. The report also suggests remedial measures to strengthen the banking system of India, which include creating awareness among banking personnel about IT and associated risks, increased involvement of independent external auditors, and increased time period for conducting statutory audit. I sincerely acknowledge the timely quality contribution of the Group led by my Central Council colleague CA. Shiwaji B. Zaware and our past President CA. M. M. Chitale who as special invitee has provided his relevant inputs in the report. With our absolute commitment to the well-being of our economy, we will continue to extend our support to the country with our professional skepticism.
I am happy to share that ICAI has been leveraging technology to bring its member and student services to their doorsteps. Some of the recent significant initiatives are:
To promote quality in bank audits for the financial year 2017-18, a number of training programmes were organised across the country, focusing on the audit of advances and NPAs. A series of interactive seminars was organised for the Central statutory auditors of banks in New Delhi (27th March 2018), Chennai (29th March 2018), Kolkata (2nd April 2018) and Mumbai (4th April 2018). Additionally, training programmes are being organised on the new/revised standards on auditing and on other developments in auditing by our Branches and other PoUs (programme organising units), towards the reskilling of our members. Let us recall that ICAI has tied up with Infosys to provide 7 e-learning modules on Finacle, customised for effective bank audit, to assist the auditors in detective controls.
To address the perception gap vis-à-vis the CA profession and help media understand the role and responsibilities of ICAI in the economic growth of our nation, we recently launched a series of workshops for media across the country. At the first such workshop organised in New Delhi on 3rd April 2018, I along with my Central Council colleagues CA. Shiwaji B. Zaware, CA. M. P. Vijay Kumar and CA. Sanjay Vasudeva addressed the media on various professional matters. These included standard-setting, ethics, difference between audit and investigation, and oversight mechanism. ICAI Vice-President CA. Prafulla Chhajed and Central Council members CA. Vijay Kumar Gupta and CA. Mukesh Singh Kushwah were also present at the workshop. Senior media persons through an effective dialogue also got to understand various professional issues and concepts.
As you may be aware, ICAI in collaboration with World Bank had organised training programmes in procurement audit and thereof for its members in New Delhi, Mumbai and Chennai. The same will now be organised in our Branches as well. To take the matter forward, ICAI has planned to highlight the World-Bank-funded projects (in external/internal audit, procurement audit/postreview, etc.) on the ICAI website so that the members, if interested, could suitably participate in the procurement and tender process of such projects.
As you know, ‘accounting and financial services’ have been identified among the 12 Champion Sectors by Hon’ble Prime Minister of India. Since then, ICAI has constantly been in dialogue with its parent Ministry, i.e. Ministry of Corporate Affairs, to draw its action plan to achieve the Vision 2022 given by the Government of India.
To promote the export of Indian CA services as well as to provide opportunity to overseas corporate in recruitment of Indian CAs, ICAI will organise Overseas Campus Placement Programme on 24th-26th August 2018. I urge all my overseas colleagues to spread words about this in their respective corporate, firm of accountants, etc., and among other potential employers, requesting them to participate in this special drive to recruit our fresh as well as experienced members. You may also participate in the HR meet, to be organised by ICAI in your country, for which the dates will be announced soon. Interviews will be held in Delhi, Mumbai and Chennai in person, wherein the corporate may participate. Interviews will also be held through videoconference on these days for the candidates based in Jaipur, Hyderabad, Kolkata, Delhi, Mumbai and Chennai. Separate announcement in this regard will be published on the ICAI website shortly.
Further, in order to overcome the language barriers and increase the employability of Indian CAs abroad, ICAI is taking initiatives to tie-up with universities/institutions approved by the foreign embassy abroad. To start with, ICAI is in dialogue with the relevant authorities with regard to French, Spanish and German languages.
On 11th April 2018, a delegation of 21 senior provident fund officers from Nepal visited ICAI and received firsthand information on ICAI’s roles, responsibilities and functions, particularly pertaining to its contribution in nation-building. The framework of Indian provident fund was also deliberated and explained to the delegates. A reference was made to our role in the establishment of the accounting institute in Nepal in the year 1997. The reception and efforts of ICAI vis-à-vis the Nepalese delegation was well-appreciated. While interacting with the delegates, I familiarised them with various activities performed by ICAI, including standard-setting, its oversight mechanism and various capacity-building measures for international accountancy profession.
Campus Placement (February-March 2018)
With the spread of economy, the demand for accounting professionals has also gone up. We at ICAI have been catering to this ever-increasing demand through our campus-placement programmes held twice a year, i.e. in February-March as well as in August-September. Recently, ICAI organised its February-March placement, where 6,029 newly-qualified Chartered Accountants participated across the country. With participation of 130 organisations along with their 221 interview panels, 1,472 candidates got the job offer. Highest salary (cost to company) offered in the domestic-posting category was 22.30 lakh per annum, with average salary (cost to company) offered was 8.40 lakh per annum.
Last month, I had informed that Small & Medium Practices (SMP) of IFAC is conducting Global SMP Survey 2018 (http://www.surveygizmo.com/s3/4116452/IFACGlobal-SMP-Survey-2018) on the key issues confronting SMPs and their SMEs (small-and medium-sized entities) clients. Since the response submitted so far from this part of the globe is not very encouraging, I would request all our small and medium practitioners to respond to this small survey in large number so that our local concerns are understood. The deadline to respond is 21st May 2018.
I am pleased to inform that the Committee on Accounting Standards for Local Bodies (CASLB) of ICAI, established in 2005 under the Chairmanship of CA. S. C. Vasudeva, convened its Golden Jubilee (i.e. 50th) meeting recently. Chief Guest on the occasion was C&AG DG (Commercial I) Shri Vithayathil Kurian. Officials from CGA and C&AG, and past Chairmen of the Committee also attended the meeting. Committed to contribute to the nation-building, the Committee aims to improve the financial reporting system in the third level of Government, i.e. local bodies of the country.
With the mandate of Government of India to promote capacity in accounting and financial services for building the accountancy sectors as hub of export promotions, we are supporting the Government in many ways. In view of this, it is important that our overseas members, whether in employment or practice, share their concerns with us so that these can be resolved suitably. These concerns may relate to the ease of employment, extending help to Indian CA students in finding avenues for articleship and industrial training, or their view on skill-gap. A questionnaire to be hosted shorty on the ICAI website, will be mass-emailed to all our overseas members. May I request the members who have had tryst with global exposure to make ICAI more aware about such professional barriers, so that these can be suitably taken up with the Government.
While our life is already stressed for a variety of reasons, unorganised and unscheduled work hours bring additional and undue stress to us, affecting our work-life balance. Rabindranath Tagore says: You can’t cross the sea merely by standing and staring at the water. Timely attempts and endeavours need to be made if we want our projects to be completed within deadlines. As we know, incomplete and pending work is a major source of stress in the life of professionals today. Therefore, all we need is to manage our work intelligently, and we can achieve some work-life balance in life, saving ourselves from undesirable longings for extensions.
Rabindranath Tagore, whose birth anniversary falls on 9th May, also says: Everything comes to us that belongs to us if we create the capacity to receive it. So, let us first aim to strengthen ourselves and further build our capacities. Work and opportunities are bound to follow, for sure. At ICAI, we have been working day and night to address the challenges and create opportunities out of them. I would request my membership fraternity to take advantage of various post-qualification courses, seminars, workshops, online resources, etc., organised from time to time by ICAI, and re-skill, rediscover and empower themselves in the best interests of their professional life.
CA. Naveen N. D. Gupta