ICAI President’s Message for January 2019 covering Polling at ICAI Elections Successfully Concluded, ICAI Initiatives Acknowledged at SAFA Board Meeting, Recent Developments in GST, GST Account Assistant Scheme , ICAI Signs MoU with IIMA, Annual AOSSG Meeting in Singapore, Ireland (Dublin) Chapter to be Opened, Guidance on Resignation/Withdrawal Issued, New Standards on Internal Audit Issued, Upgraded AS 19, 38 and 40 Cleared, Revised SAs 800, 805 and 810 Approved, Mandating UDIN in Phased Manner, DISA Syllabus Revised, Training Hours of Diploma in International Taxation Increased, Survey on State of Internal Audit Profession in India, Building of Rajahmundry Branch of SIRC Inaugurated, Responding to Misleading Media Reports, Let’s Join Global Green Drive and Growing Profession and Rising Responsibilities.
The Institute of Chartered Accountants of India
My Dear Professional Colleagues,
Happy New Year to all of you! May happiness, peace and prosperity never abandon you and your loved ones! May the New Year bring loads of cheers and keep you free from all worries and fears! May your lives be filled with hope, joy and blessings!
ICAI will soon complete the 70th year of its meaningful existence with excellence, anchoring the aspirations and bringing inclusive growth for its stakeholders ever since inception. Registering a strong presence in India as well as globally, Indian Chartered Accountants have carved out a niche professional standing for themselves contributing to the economies across the globe. With its accounting, auditing, education and ethical standards compliant and benchmarked with the best global standards and practices, ICAI has been producing cutting-edge and competent professionals. Scaling the heights of professional excellence, ICAI and CA profession today is the trustee of public accountability and interest in the country.
While it is crucial to work for future, it is equally important to know our past and heritage. We must connect to our roots in order to understand where we stand today and where we would be tomorrow. Accountancy profession of today is duty-bound to be of relevance and continued value while being on path of a transitional journey to be always remembered as the driver of national economic growth. It has been and would remain a relentless pursuit for our continued contribution to the jurisdictions where we professionally exist. We must keep intact the trust put in us by society through our professional endeavours in the fields of accounting, auditing, taxation, internal audit, financial reporting, forensic audit, government accounting, valuation, insolvency, compliance audit, forex and treasury management, ERP implementation, systems audit, and so on.
Now, let me brief on some of the significant developments in accountancy profession over the last one month:
The purpose of Elections is to know the will of the people. Elections are one of the most powerful nonviolent tools of democracy. Basically, you vote for your rights, your freedoms and your interests. When voters put their values into their votes, they help the state achieve democracy at governance level and reiterate the commitment to democratic virtues.
Elections to 24th Central Council and 23rd Regional Councils were held successfully on 7th and 8th December, 2018 across 706 notified polling booths. However, polling at 8 notified polling booths in Hyderabad had to be postponed owing to the conduct of general elections to the Legislative Assembly of Telangana at the said identified booths on 7th December 2018. Polling at these booths was also conducted on 14th-15th December 2018. A total of 248 candidates, including 83 for Central Council and 165 for Regional Councils, have contested in the elections. Counting of votes for election to Central and Regional Councils commenced concurrently from 19th December 2018 at all respective Regions.
Election process this year has been unique as the counting of votes has commenced at each of the Regional centres separately and independently at ICAI Noida for Northern Region, ICAI Kanpur for Central Region, ICAI Mumbai office for Western Region, ICAI Chennai for Southern Region and ICAI Kolkata for Eastern Region.
Results of Central Council Declared: As you know, the results of elections to the 24th Central Council of ICAI have already been declared. By the time this communication goes into print, the results of elections to 23rd Regional Councils would also have been declared. As while it is win for some and loss for some, it is always win for democracy. I congratulate all the elected members and sincerely hope that they will take our dear profession to greater heights. At the moment, I take this opportunity to extend my best wishes to all of them.
As you are aware, ICAI has launched the UDIN (Unique Document Identification Number) facility, using which the regulators/ banks/ third parties will be able to check the authenticity of reports/certificates. In the recently-concluded SAFA Board meeting in Dhaka on 10th December 2018 my Central Council colleague CA. Ranjeet Agarwal made a presentation on UDIN which was well-appreciated by all. SAFA Board has decided to form a taskforce to implement UDIN among the SAFA member bodies too and CA Ranjeet Agarwal will convene this taskforce.
Further, as you know, this year Women Leadership Committee has been formed at SAFA with the objective to formulate and implement plans, policies and programmes for the development of women professional accountants of the SAARC region and ICAI has been given the responsibility of chairing this newly-formed Committee in its first year. I am happy to inform that SAFA Board after reviewing the good performance of this Committee in last three months has decided to extend the term of Chair of the Women Leadership Committee for two more years, i.e. till 31st December 2020. As you may be aware, ICAI Central Council member CA. Sripriya Kumar is the Chairperson of SAFA Women Leadership Committee and I congratulate her for keeping the ICAI flag high at SAFA.
I have also briefed the SAFA Board about the WCOA 2022 that would be held in Mumbai and requested for their support in making it a memorable WCOA, as this will be held in South Asia for the first time post-1904.
Considering the unavailability of functionality (online utility) for filing of Forms GSTR 9, 9A and 9C on the portal, due date for filing of GST Annual Return in Form GSTR-9 (normal dealers)/ GSTR- 9A (composition dealers) and GST Audit Report in Form GSTR-9C has been extended to 31st March 2019, which will eventually be helpful for industry. ICAI had also highlighted this issue and submitted a representation on 4th December 2018, requesting for an extension of the due date.
Further, ICAI has submitted to the Government its detailed suggestions on the Form GSTR- 9CReconciliation Statement on 11th December 2018 along with its suggestions on the annual return in Form-9. A representation towards permitting the availment of input tax credit under GST pertaining to the financial year 2017-18 till 31st December 2018 had been submitted in October 2018 and a follow-up representation to this effect was made in November 2018.
Then, GST Council in its 31st meeting held on 22nd December 2018 inter alia has decided to extend the due date of annual return in GSTR 9 and GST Audit and Reconciliation Statement in GSTR 9C up to 30th June 2019 with an option to pay the additional liability and tax. HSN-wise reporting has been relaxed for the inward supply to 10% value or more instead of complete details, while filling these forms. It has also been decided to extend the time limit for claiming the ITC for the FY 2017-18 from 20th October 2018 to 31st March 2019. Let me tell you that ICAI had submitted a representation in this regard. Late fee has been waived for filing forms GSTR-1, 3B and 4 for the period from July 2017 to September 2018 after 22nd December 2018 but not later than 31st March 2019. Payment through single-tax ledger, rationalisation of interest calculation, and single authority for refund disbursement are key changes that have been approved in this meeting.
I also wish to inform that ICAI has come up with an updated series of E-Learning on GST through recorded video sessions covering almost every important topic of GST comprehensively including GST annual return and audit that were recorded in November 2018. You may visit www.idtc.icai.org to subscribe the E-Learning. Short videos on various GST concepts have also been created and made available on the YouTube channel of Indirect Taxes Committee of ICAI.
Accountancy and Finance services, one among 12 Champion Services Sectors, have been the core of ICAI’s profile and its contribution to the nation. To enhance the availability of trained manpower in every corner of the country and facilitate GST implementation at an affordable cost, Government of India has recently approved the scheme of creating the cadre of GST Account Assistant under the Proposal of Ministry of Corporate Affairs for ‘Accounting and Finance Services. This scheme will be administered by the ICAI-ARF.
I am happy to inform that an MoU has been recently signed with the Indian Institute of Management, Ahmedabad, which is a 1961- born premier institution globally known for its management education. To establish mutual cooperation between the two institutions for offering and co-hosting of open-enrolment and customised training programmes exclusively for Chartered Accountants, the MoU will benefit the Chartered Accountants in acquiring management and other relevant skills, and help them in achieving leadership positions in the contemporary digital and business environment. This will add a new dimension to the field of accounting and management education in the country.
As you know, ICAI’s contribution at various forums and platforms of international accounting standard-setting has been appreciated thoroughly. Recently, 10th annual meeting of Asian-Oceanian Standard Setters Group (AOSSG) was held on 21st- 22nd November 2018 in Singapore. ICAI Central Council member and AOSSG Vice-Chair CA. S. B. Zaware and Central Council member CA. Dhinal Shah, among others, were also present. ICAI representatives made a presentation on Accounting Issues Involved in Bullion (Gold) Lending and Borrowing. Let me assure that ICAI will continue to play a key role in the international accounting standard-setting scenario.
I am happy to inform that the setting up of a foreign Chapter of ICAI in Dublin, Ireland, has been approved. The Chapter, to be known as Ireland (Dublin) Chapter of ICAI, will be the 34th foreign Chapter of the Institute and the third in the European continent.
Let me also inform that the Institute has released the Implementation Guide on Resignation/ Withdrawal from an Engagement to Perform Audit of Financial Statements in time, which deals with various aspects of auditors’ resignation. As you recall, this year, there have been a number of mid-term resignations by auditors particularly in the cases of listed companies. Considering this, ICAI had decided to examine the reasons and circumstances behind this and constituted a Group, which in turn had decided to create more awareness about the responsibility of auditors in form of issuing the desired guidance. In fact, International Auditing and Assurance Standards Board (IAASB) too had recognised this issue and held a specific conference in Paris in January 2017.
I am happy to inform that ICAI recently issued various new SIAs (Standards on Internal Audit) namely SIA 210, Managing the Internal Audit Function, SIA 220, Conducting Overall Internal Audit Planning, SIA 310, Planning the Internal Audit Assignment, SIA 320, Internal Audit Evidence, and SIA 330, Internal Audit Documentation along with Preface to the Framework and Standards on Internal Audit, and Framework Governing Internal Audits and Basic Principles of Internal Audit. As you know, SIAs are critical in ensuring and enhancing quality in audits of financial statements. It is, therefore, necessary that auditors understand and implement these Standards in their audit engagements.
As part of the project of upgradation of the existing Accounting Standards to bring them closer to Ind AS, three upgraded Accounting Standards (AS), namely, AS 19, Employee Benefits, AS 38, Intangible Assets, and AS 40, Investment Property, have been cleared by the ICAI Council recently. Key change in AS 19 is that actuarial gains and losses for post-employment benefits obligations will be recognised in Other Comprehensive Income whereas under AS 15 the same were recognised in the profit and loss. To simplify the accounting, AS 38 does not allow revaluation model under subsequent recognition of intangible assets, AS 40, apart from not allowing use of fair vale model, does not require disclosure of fair values of investment properties unlike Ind AS 40.
I am happy to inform that the ICAI Council has recently approved the revised Standards on Auditing (SAs)– SA 800 (Revised), Special Considerations – Audits of Financial Statements Prepared in Accordance with Special Purpose Frameworks, SA 805 (Revised), Special Considerations – Audits of Single Financial Statements and Specific Elements, Accounts or Items of a Financial Statement, and SA 810 (Revised), Engagements to Report on Summary Financial Statements. The changes are not conceptual in nature and only conforming changes have been made consequent to the issuance of new/ revised SAs on auditor reporting, i.e. SAs 700, 701, 705, 706, 260, 570 and 720. ICAI has also brought out the revised edition of Implementation Guide to SA 230, Audit Documentation which has been written in form of FAQs.
As you are aware that to secure the certificates/ documents attested/ certified by practicing Chartered Accountants and to trace the forged/ wrong documents prepared by any third person misrepresenting herself/ himself as Chartered Accountant, ICAI had implemented an innovative concept of UDIN, i.e. Unique Document Identification number. We wish to inform that for this prestigious project of UDIN, ICAI has engaged Tata Consultancy Services (TCS) who is also automating and will maintain the life cycle of CA Members and Students making them largely online on a digital platform. To enable TCS do the huge data migration and data audit which will require around 30 days before the UDIN Platform becomes mandatory, Central Council of ICAI has decided to mandate UDIN with effect from 1st February 2019 in a phased manner as against the earlier announced date of 1st January 2019.
I wish to inform that the Revised Syllabus of Diploma in Information System Audit (DISA) has been approved. It combines technology, information assurance and information management expertise that enables an information system auditor to become trusted Information Technology advisor and provider of IS Assurance services. The updated syllabus has included the recent/ emerging developments in the field of Information Technology and IS Auditing. The focus of revised syllabus is to provide hands-on training, live case studies and practical exposure. A module on Emerging Technology and Assurance Aspects has also been introduced which includes blockchain, robotics process automation and data analytics.
In view of the existing and ongoing developments in the area of international taxation, and the feedback of our members and participants, we have recently approved an increase in the number of hours of training that is imparted to its participants, i.e. from 120 hours to 126 hours, which will be applicable to the batches of December 2018 and onward. Changes in the structure of course will be decided soon and communicated suitably.
I wish to inform our stakeholders that ICAI has recently launched a survey on the State of the Internal Audit Profession in India to capture the views of our members as well as all other professionals working as internal auditors. It will also elicit points of view on the management on the independence of internal auditors, direct reporting to the Board/ Audit Committee, impact of emerging technologies and their expectations from ICAI to serve the needs of various stakeholders, etc. Very soon, ICAI will use this data to develop an action plan, to help auditing profession respond to its challenges and move forward effectively.
I am happy to inform that I along with ICAI past President (and my Central Council colleague) CA. M. Devaraja Reddy, former Central Council colleague CA. J. Venkateswarlu, members of the Branch Managing Committee and other dignitaries, inaugurated the building of Rajahmundry Branch of SIRC, Andhra Pradesh, on 24th December 2018 which was an addition to the infrastructure of Indian CA profession. I am sure, this will go a long way in contributing to the empowerment and providing doorstep services to our stakeholders, especially members and students.
If you recall, in one of my previous communications, I had mentioned about certain media reports that carried out misleading and misinterpreted information and analyses, putting the ICAI and Indian accountancy profession in a bad light.
ICAI, in the past, has also taken up two such reports and filed formal complaints with the Press Council of India. These were carried out by Hindustan (a Hindi daily) and Economic Times (an English economic daily) in April and July 2017 respectively. While the Hindustan, without verifying the facts, reported about 17.5 thousand CAs on the target of Income-Tax Department, Economic Times reported on the CA professionals as prime facilitators of black money generation, misquoting the speech of our Prime Minister itself. I am pleased to inform that recently the Inquiry Committee of Press Council found that Economic Times has violated the norms of journalistic ethics and recommended that the newspaper be ‘censured’. It also warned the Hindustan and directed it to publish the order passed by the Council immediately. Let me reiterate that ICAI takes a serious note of such instances of misleading and incorrect reporting, represents to the concerned publications, and reports to the appropriate authorities seeking suitable legal recourse, wherever applicable.
The blatant race of human beings today to exploit the earthly resources in the name of development is fast depleting our Mother Nature, adding to the catastrophe caused by global warming across the world. Global warming is a matter of grave concern for each and every thinking individual globally. We Chartered Accountants, on our part, can support this cause effectively by way of sustainability/ integrated reporting for our organisations/ clients, cutting down on the use of paper, and encouraging our stakeholders to go green. Here, I reiterate my appeal to my professional colleagues to say NO to receiving hard copy of Journal and shift to reading the e-Journal instead. Please check https://www.icai.org/new_post.html?post_id=12763&c_id=240 and support the I GO GREEN WITH ICAI initiative. Let’s join hands for this benevolent global cause, in the spirit of Think Global-Act Local.
ICAI is committed to work for the welfare of its members and students in every possible way. As you know, ICAI had set up Chartered Accountants’ Benevolent Fund(CABF) in the year 1962 to provide financial assistance for maintenance, education or medical treatment of its members and their families in distress. The Fund, with the contributions of its members, is gradually growing strong. A total contribution of 1,02,35,824/- has been received so far by the CABF and a sum of 73,00,000/- has been granted as financial assistance to the members in distress and to the families of deceased members during 1st April 2018 to 30th November 2018. I would appeal my membership to keep donating to the Fund so that it will always be there to help our members in distress and the families of our deceased members.
Students, one of the key pillars of our profession, are our future. So guiding and grooming them is going to be a very responsible task and a service to our dear profession. Kindly advise the students in your contact to work hard and build on their knowledge and professional competencies. Here we cannot say that ignorance is bliss, since this leads to the unknown and unfathomable territories of our fear and diffidence. Fear will not stay where there is knowledge. Kindly advise them not just to study and learn, but to observe too, since their keen observation will take their knowledge to a different and higher level. They will be better human beings too, and this will eventually reflect on all walks of their lives.
Every year on 26th January, we celebrate the Republic Day of our nation, observing the implementation of our Constitution, which provides us Freedom of speech and expression, and Freedom of conscience and free profession, and hands over a set of rights to each one of us. At the same time, 26th January also reminds us of our responsibilities towards our fellow citizens, our society and our country, which all of us should remember, come what may.
Let us assert our rights, exercise our freedom and behave responsibly so that others around us could also do the same.
A very happy REPUBLIC DAY to all of you!
CA. Naveen N. D. Gupta
New Delhi, 26th December 2018