A birth is a cause for celebration. So is July 1, when all of us celebrate the spirit of fearlessness, integrity and evervigilant attitude of the CA profession.
Birth of an institution is a dignified event that moves us above the temporary concerns of our day-today lives. It is a symbol of human aspirations for the generations to come. We, generally, anticipate its significance, but disinterestedly, without realizing that there are always efforts and resolutions of multitude of differences behind the birth of an institution. Here, we must remember that gold has to get through the fire to become kundan losing all its impurities. Differences, therefore, need to be celebrated. And from this very mix of differences, appears a being that gives us reasons to rejoice and celebrate. It is said, the more we celebrate something, the more there will be of that thing to celebrate.
A celebrated author Og Mandino says: Never again clutter your days or nights with so many menial and unimportant things that you have no time to accept a real challenge when it comes along…A day merely survived is no cause for celebration. What we have with us at present is a longlong tradition of knowledge systems with a comparatively smaller today, which is the space available to us where we can deliver our decision, creation and intention. This long-long tradition includes volumes of accomplishments by the forefathers of our profession. The tradition we have behind us has to be our guiding force and our vision. Shri G. P. Kapadia writes: No profession can aspire to progress unless it has a vision and (it) sets service to the community as its objective. In the last 61 years of the existence, the tangent of growth the profession has drawn will, for sure, widen the frontiers of our scope and opportunities. We have an obligation towards our society that emanates from the respect we are given for the roles we play and the measures we take in the interests of the nation.
On the eve of the auspicious CA Day, let us vouch for our professional integrity that we should never indulge in work without regard to the ultimate truth.
Towards Social and State Obligations
IFRS Training for Government and PSUs Officials
As part of our responsibility to train officials of various departments of the Government and public sector undertakings on the matter of IFRS implementation, meetings were held with the Secretary, Ministry of Urban Development, CMD, Power Finance Corporation, Finance Advisor, Department of Telecommunications, etc. As a matter of follow-up, details of the training programmes/workshops are being sent wherever desired. Also, meetings with officials of various Departments and public-sector undertakings are being arranged. It shall be our sincere endeavour to perform the role in a manner befitting the ICAI as expected of us by the Ministry of Corporate Affairs.
National Foundation for Corporate Governance (NFCG)
Investor Awareness Proposal
Shri Salman Khurshid, Minister of State (Independent Charge) for Corporate Affairs (Independent), while chairing the sixth meeting of the NFCG, talked about a need for nation-wide investor awareness programmes. The meeting was also attended by various regulators, institutes and chambers, which were assigned various roles to undertake the same, i.e. investor awareness programmes all over the country. The MCA has decided to organize Indian Investor Week from July 12 to 17, 2010 on the theme, ‘Informed Investor – An Asset to Corporate India’. We will conduct a mega event in Chennai during the Investor Week and hold 750 investorawareness programmes across the country particularly in remote towns in this financial year. We have issued directions to our Regional Councils and Branches to ensure success of the same. ICAI being a partner in nation building, we consider it our duty to educate and guide our aam aadmi (investors) towards safe investments to support the MCA initiatives
Standards in Internal Audit
The meeting was apprised that the Institute had been formulating standards in internal audit since 2004. The same were not mandatory keeping in view the multidisciplinary nature of such audits in various undertakings. It was suggested that the Central Government on its own or through the SEBI may mandate the adoption of standards in internal audit as formulated by the ICAI for various entities.
Defaulting Government Companies under the Companies Act, 1956
The Indian Institute of Corporate Affairs organized a workshop on Compliance of Provisions Relating to Finalization and Disclosures of Accounts under the Companies Act, 1956 on May 25, 2010 wherein officials from the C&AG, various State PSUs, Registrar of Companies, Standing Committee of Public Enterprises, Department of Public Enterprises, Ministry of Corporate Affairs and the ICAI participated. In the meeting, the issue of accounts of various PSUs being in arrears, both central & state, was discussed. Public sector plays a key role in Indian economy. It is quite disturbing to note that as of September, 2009, 14 Central PSUs had their accounts in arrears for periods ranging from 2 to 13 years and over 600 operational state PSUs whose accounts are in arrears for periods ranging from 1 to 25 years. It is a horrific knowledge that these companies are taking critical financial decisions even in the absence of required financial information. A three-pronged strategy was agreed to be explored by fixing a rational cutoff in terms of the number of years, e.g. seven years, beyond which accounts would not be considered, by developing appropriate guidance to help the concerned auditors in such situations, and by utilizing services of the CA firms in updation of accounts and imparting training to the officers of the State PSUs. Since the cutoff may have implications on the audit and the concerned auditor would then need to start with an appropriate modification in respect of non-availability of the opening balances, therefore a ‘development of appropriate guidance’ by the ICAI was suggested.
Resource Building in Public Finance
Owning our responsibility to the Government and our society at large, in ensuring effective utilization of public finance, which involves issues in budgetary allocation, we are happy to announce that we will release, on the auspicious CA Day, i.e. July 1, 2010, a book titled, Issues in Public Finance, that covers areas like fiscal policy, direct and indirect tax structure, fiscal responsibility and budget management act, public expenditure control measures, and external debt.
Meeting Finance Minister and Other Key Government Officials
Continuing with our efforts to request the Government to review the process of autonomy to banks for the appointment of auditors, a meeting was held with Shri Pranab Mukherjee, Hon’ble Finance Minister of India. Apart from the issue of autonomy to banks in the matter of appointment of auditors, continuance of branch audit and tax audit of branches of publicsector banks, mandatory appointment of chartered accountants as internal/ concurrent auditor of banks and allotment of audit of not more than one foreign/private bank, either on central or branch level to one firm, were raised. These concerns were also shared with Shri Ashok Chawla, Finance Secretary, Government of India, during the Council meeting of the Institute on June 18, 2010, which he addressed. The same were also discussed with Shri Alok Nigam, Joint Secretary and Shri Samir K. Sinha, Director, Banking Operations, Ministry of Finance. We also met Shri Motilal Vohra, General Secretary of All India Congress Committee, to press our views on the issue of autonomy of appointment of auditors.
MRA with New Zealand Institute
On the sidelines of the CAPA Board Meeting, meetings were held with the office bearers of the New Zealand Institute of Chartered Accountants with regard to the mutual recognition agreement (MRA). We were informed that New Zealand was looking at our model of the MRA entered into with the Institute of Chartered Accountants, Australia. Certain positive outcomes are expected towards the end of November 2010.
Agreements with CPA, Ireland and Higher Colleges of Technology, UAE
We are pleased to share with you two important agreements which are likely to be concluded in July 2010. The approval from the Ministry of Corporate Affairs on the MRA with the CPA, Ireland, has been received and we are on the verge of signing this qualification recognition arrangement very soon with them. In a similar development, approval from the MCA with regard to the Memorandum of Understanding (MoU) with Higher Colleges of Technology, Ministry of Higher Education and Scientific Research, UAE has also been received which contemplates a technical cooperation program by the Institute in developing Competency building. We shall sign this MoU upon getting a clearance from the Ministry of External Affairs.
CAPA Board Meeting at New Zealand
The undersigned along with the ICAI Vice President CA. G. Ramaswamy and a past-President CA. Kamlesh Vikamsey attended the CAPA Board meeting held in Wellington, New Zealand. There was a change of guard at the CAPA management with Keith Wedlock, a representative of New Zealand Institute of Chartered Accountants, taking over the reins as its Deputy President. We discussed the CAPA’s involvement with the IFAC Board and Committees and its contribution in providing inputs into the IFAC activity and to identify opportunities to consider in planning future initiatives. Issues related to small and medium-sized entities (SMEs) and practitioners (SMPs) were also discussed. It was also discussed how the IFAC could be effective in supporting the profession in the area of corporate governance.
Edinburgh Group and IFAC Meeting at Vancouver: Capacity Building of the SMPs
We had also the occasion to represent the ICAI at the IFAC Board during June 2-4, 2010, at Vancouver in Canada to share the ongoing international perspectives in many of the emerging developments which accountancy sector has on its radar. The IFAC meeting primarily focused on how SMPs can help SMEs perform better and conform to the rules and various operational regulatory challenges that SMPs face. We pointed out in the Edinburgh Group that we must first lay down the criteria of assessment that is objective and amenable to the measurement. We must be able to assess if the jurisdiction has done something for them by its corrective actions, e.g. reducing the cost of implementation by providing checklists, software, etc., and, then assess on regular basis if SMPs were empowered. We suggested to striving to assess, through a survey, the impact of measures in the form of a rise in the income of SMPs over a period, and an increase in mergers and the number of consolidations taking place. Or else, no initiative will be productive without such an assessment, we suggested.
Improving the principle-based Standards on International Accounting Education, various key developments on International Standards on auditing and the issues relating to the definition of the Professional Accountant were also deliberated upon at the meeting. It was important to understand and deliberate upon the changing paradigm and to interact with other counterpart institutions from other accountancy bodies and share areas of mutual interests including the CGA, Canada, with whom currently a dialogue on reciprocity is receiving attention.
The Ministry of Commerce, Govt. of India, has sought comments on position paper in regard to the accountancy sector in general and India’s view point on the position paper on accountancy’s service as under formulation at WTO level, as also the disciplines on Domestic Regulations of the GATS agreement. We wish to make it clear that the Institute is not averse to competition and our members are capable of excelling and making their mark felt in professional arena globally. What we aim at is a quid pro quo and reciprocity in its right earnest by addressing the current limitations as also recognition of our qualification and would strive to take up the matter with the policy makers so that the while the interest of our members are protected, and as and when the element of competition gets factored in, equal opportunities are leveraged upon them as well in other territories by pressing for removal of non-trade barriers.
Meeting with Reliance CMD Mukesh Ambani
With a view to spread the ICAI message across the industry, we met Mr. Mukesh Ambani, the Chairmancum- Managing Director of the Reliance Industries Limited (RIL), the largest Indian business house. Discussions were held on the issues arising out of implementation of the IFRS, new Companies Bill, GST, Direct Tax Code, etc. The meeting was extremely useful. Mr. Ambani assured us of the whole-hearted support of the RIL in our endeavour for training programmes, particularly on the IFRS. He, however, laid stress on the fact that while implementing the IFRS, care may be exercised to study and determine the requirements of the Indian industry. Central Council members CA. Subodh K. Agrawal and CA. Pankaj I. C. Jain were also present in the meeting. We are grateful to our Central Council colleague CA. Mahesh P. Sarda for organizing this meeting.
Meeting with Ms. Tina Ambani from ADAG
A meeting with Ms. Tina Ambani from Anil Dhirubhai Ambani Group (ADAG) was held. She explained the work undertaken by the ADAG particularly with regard to CSR (corporate social responsibility) – like setting up of hospitals, etc., and other charitable initiatives. She was all praise for the valuable contributions made by the Indian chartered accountants to the industry. We apprised her of our publications on accounting in non-profit organizations, etc. Central Council members CA. Subodh K. Agrawal, CA. Bhavna G. Doshi and CA. Pankaj I. C. Jain were also present in the meeting. Role of CA. Bhavna Doshi is praiseworthy for organizing this meeting.
Grant of Fee Exemption
We are pleased to apprise that the Institute has recently decided to grant fee exemption to members of the Institute on the grounds of the physical challenge in related fields to the extent of fifty per cent of the registration fee for the various post-qualification courses of the Institute. We are confident that the fee exemption would facilitate and motivate the members concerned to pursue the post-qualification course of their choice to acquire industry-specific knowledge and develop expertise in the related field.
Capacity Building of SMEs/ SMPs
We, at the Institute, strive to help the SMEs and SMPs in escalating their productivity and services. We are relaeasing, on July 1, a toolkit on Correspondence Automation, Management Software and Knowledge Management Solution namely, eSecretary and KDOC. We want the CA Firms and SMPs to grow bigger and create world-class identity. It is proposed to provide eSecretary and KDOC software free of cost and providing free licenses and post sales training to all our members and firms, as a significant addition to their professional assets.
Certificate Filling Centres (CFC)
We want to inform you that as a part of the revival of the CFC scheme, the MCA has proposed the renewal of existing CFC and also allowing fresh application for the new CFC. The new scheme will be launched on July 1, 2010, and may be kept open for two months from the date of the launch. Members can apply for registration/ renewal to the Corporate Law and Corporate Governance Committee (CL&CGC) of the Institute.
Multipurpose Empanelment Applications
More than 28,800 multipurpose empanelment applications have been received, without any extension of last date. We believe members must have already sent their physical declarations to the office for further processing.
Members’ Voice at Branch Felicitation Programmes
The undersigned attended felicitation functions held at Ambala, Amritsar, Jalandhar and Panipat Branches of NIRC, and at Nagpur Branch of WIRC. We had extensive interaction with the members and students of the respective Branches and we assured them that the Council would do everything possible to come up to their expectations. Member were concerned about the issues on IFRS and GST. Branches sought revision of their grant and a larger infrastructure facility, particularly in relation to manpower.
IFRS Training for Employee Members
We are really pleased to see the enthusiasm and participation of our employee members, as they turned up in large number for the workshop on IFRS, Orientation Programme on IFRS. During the workshop, first-time adoption of IFRS and issues in revenue recognition and financial instruments were discussed. At its conclusion, the employees expressed their desire for a repeat of the aforesaid programmes and also for holding the programmes on other topics including corporate governance and corporate laws. We consider the quality of manpower of an organization is barometer of its excellence. We assure to conduct such programmes all over the country for our staff members.
It is a matter of great satisfaction that the National Conventions held in Ludhiana and Jaipur were attended by a considerably large number of students. The students raised primarily three issues, viz. propagation of the concept of secondment, transfer of the articles and revision of stipend. They also wanted us to address their need for coaching classes and quality study materials from the Institute. The matter concerning the transfer of the articles and the revision of stipend will be taken up and discussed in the coming Council meeting to be held from June 29, 2010, to July 1, 2010, at the Institute headquarters.
Pilot Project to be Launched
We are happy to inform our students that as part of the Board of Studies initiatives to ensure uniform quality education to them, it is proposed to connect various ITT centres through web-based model. The proposed Project would be launched in the mid of July. The Board is addressing the issue of holding the coaching classes through virtual classes. The same may be implemented in a phased manner and the first phase may be launched by the end of September 2010.
Recognition to Profession
CA. Piyush Goyal Elected to Rajya Sabha
We are happy to share with you that our member CA. Piyush Goel has been elected to Rajya Sabha from Maharashtra recently. We heartily congratulate him and expect him to take up the case of profession.
ICAI Past-President CA. Kamlesh Vikamsey on UNDP Audit Committee
It is again great news that our past- President CA. Kamlesh Vikamsey has been appointed as the member of Audit Advisory Committee (AAC) of United Nations Development Programme, where he is expected to contribute in building a stronger culture of transparency and accountability. We congratulate him and wish him the best for this 2-year term with the UNDP.
I always remember what Shri G. P. Kapadia had said on our allegiance to the Institute in 1951: ‘This is your Institute and mine and of each of us. Let us stand by it very loyally, let the altar of worship be our own Institute, our own country. We owe a homage to our country and our own Institute. It is our sacred duty to build it up, to strengthen it, to get for it the best of traditions and the highest status possible in course of time.’
We have noticed that at times members have grievances regarding the services rendered by the Institute. Many a time, the grievance takes the form of expression of irreverence towards the Institute. It is really strange how they can dissociate themselves from their roots. We would only suggest they should strive to know more about the Institute and its glorious intellectual tradition, and, we are sure, there will automatically be an emergence of respect in their attitude to their Institute. Let me say that that it is our Institute and we need to show the reverence that the Institute deserves. In all, it is our Alma Mater and we all must have a sense of pride in being a member of the Institute which has produced chartered accountants second to none.
Human beings are turning utilitarian and, therefore, are in a hurry to get rid of everything that is old and past. It is as if we want to get disconnected from our history. If, actually, this is done, we will have to unlearn all our learning and forget our cognition processes, and go back to the pre-historic days. That is to say, our knowledge at present is because of the history behind us. We can not afford to ignore our tradition, as, after some years, we have to andwill get merged with it.
And it is with this spirit, we want to congratulate all associated with the profession on the coming CA Day, i.e.July 1. Let us celebrate together the glorious gift of our forefathers to our profession. Adieu!
CA. AMARJIT CHOPRA
June 27, 2010