The Institute of Chartered Accountants of India (ICAI) elected its new President CA. Atul Kumar Gupta & Vice-President CA. Nihar Niranjan Jambusaria on February 12, 2020. The new President & Vice-President addressed the media & interacted with them on February 13, 2020 at New Delhi.
During the interaction, the President shared the following initiatives undertaken by the Institute.
- Structural Improvements
- ICAI is working towards creating a regulatory environment wherein the Disciplinary cases shall not be pending for more than a year. To achieve this objective, amendments are being brought out in key areas for removal of procedural hurdles and enabling provisions to adopt the technological advancement.
- For the purpose of expeditious disposal of cases, the ICAI has introduced the concept of E-hearing wherein parties are not required to travel to different places for hearing. Once e-hearings are implemented, it would not only provide comfort and ease to parties to complaint but would also result in increase in the disposal rate. Further, E-Hearings are cost and time effective.
- Significant Achievements
- As on date, the improvements and disposals of Disciplinary matters at ICAI is a priority for the Institute. During the year 2019-2020, the Institute concluded hearing in more than 400 cases.
FINANCIAL REPORTING REVIEW BOARD (FRRB)
- The Financial Reporting Review Board (FRRB) is playing a paramount role in improving the financial reporting practices prevailing in India. The Board reviews the general-purpose financial statements of various enterprises with a view to determine, to the extent possible, compliance with the generally accepted accounting principles in preparation and presentation of financial statements, compliance with the disclosure requirements prescribed by regulatory bodies, statutes/rules and regulations relevant to the enterprise and compliance with the reporting obligations of the enterprise as well as the auditor.
- The Board also supports various regulators and undertakes the review of cases as referred by Ministry of Corporate Affairs (MCA), Securities and Exchange Board of India (SEBI) and other regulators, from time to time.
- In order to scale up the capacity of the Board, to reduce the turnaround time taken in the whole review process and to make regulatory function more impactful, the FRRB is being reformed and more benches would be created. It would definitely be helpful in further strengthening financial reporting practices in India which would promote stakeholder’s confidence in audited financial statements.
PEER REVIEW PROCESS
- ICAI has been consistently striving to provide better services to members and to make the process of peer review more user friendly, effective and efficient.
- Towards this end software has been developed for the automation of the Peer Review Process.
SUSTAINABLE ACCOUNTING STANDARDS BOARD
ICAI for the first time will be establishing Sustainable Accounting Standards Board to help companies in achieving sustainable development goals.
This is not only happening for the first time in India but is also the first instance at the global level. The board would be launched tomorrow and discussions would be held with stakeholders to take the process forward.
With the proposed standards, there would be disclosure requirements for companies in terms of “sustainability part” or sustainable development goals of the United Nations (UN).
ICAI will be developing reporting requirements for companies to comply with…there will be columns in the balance sheet where Companies have to report .The board, which would be part of ICAI, would take a month or so to stabilise and to bring all financial and non-financial stakeholders on board dealing in climate change and skill based education. It would be a “coordinated and unified” exercise.
- ICAI through its research arm, ICAI ARF entered into an agreement with Indian Railways in 2017 for introducing the Accrual based Financial Statement as an additional set of Accounts to existing Cash based Government Accounts which is the critical milestone in the history of Indian Railways towards embracing Accounting Standards and best practices being followed worldwide in the sphere of financial accounting and reporting. Accrual based financial statement have supported Indian Railways in better utilisation of available resources, estimation of future liabilities and prioritisation of spending. It paved the way for best financial management practices to be introduced in Indian Railways.
- Indian Railways has also approved the mapping of Finance Code submitted by ICAI ARF and now CRIS Professionals are working on executing those changes.
MONITORING THE TENDERING PROCESS
- The Tendering of Professional Services has always been an area of concern for the Institute. Organisations are sometimes floating the tenders without mentioning any Minimum Fees or quoting very low fees. To address the issues related to Tendering, a Group for “Monitoring the Tendering issues” has been formed with an aim to monitor the tenders floated and their standardization, taking up with CVC for determining the manner of evaluation of tenders related to professional services, to develop a mechanism for monitoring and analyzing the responses of the members and referring the deviations at appropriate level.
E-INVOICE UNDER GST
- Supported Goods & Services Tax Network (GSTN) in drafting an e-invoice standard, which also takes into account the requirement under tax laws and has features, which are required for international trade.
- GST Council has approved introduction of ‘E-invoicing’ on voluntary basis in a phased manner for reporting of business to business (B2B) invoices to GST System starting from January, 2020. It would be made mandatory from April, 2020 for specified taxpayers.
NEW CODE OF ETHICS
With regards to code of ethics and changing environment, ICAI has already approved the revised code of ethics for it’s members which also includes the Non-Compliance with other Laws and Regulations (NOCLAR) meaning thereby, a CA will be issuing the report of compliance of various relevant laws applicable to a company wherever he comes across during the course of the audit. The new code will be implemented from July 1, 2020.
MANAGEMENT DEVELOPMENT PROGRAMME (MDP)
- The First Batch of the Management Development Programme for the CA Final Rank Holders in collaboration with the Manipal Global Education was organized in August-Sept 2019 at Bangalore.
- The Programme aimed at building upon the leadership and managerial skills of the Newly Qualified Chartered Accountants.
- The Key highlights of the 1st Batch of MDP were as mentioned below:
- 82 rank holders appeared for the special placement programme
- 100% jobs offered to the participants
- Highest overseas annual package was Rs. 36 lakh and highest domestic annual package was Rs. 24 lakh per Annum
EVALUATION OF ICAI QUALIFICATION BY UK NARIC
With the aim of expanding the opportunities for Professionals in foreign jurisdictions, the Institute had engaged UK NARIC (The National Recognition Information Centre for the United Kingdom) a renowned UK national agency responsible for providing information and expert opinion on qualifications and skills worldwide, to conduct an independent benchmarking study, evaluating the comparability of the ICAI Intermediate and Final level in the context of the UK and UAE education systems.
- The system of conduct and evaluation of composite examinations comprising Multiple Choice Questions (MCQs) of 30 marks and Descriptive questions of 70 marks was implemented w.e.f May-2019 examinations. For Answering MCQ’s, OMR answer sheets were introduced to facilitate error free machine-based evaluation of the same.
- Needful steps are being taken to digitally evaluate the answer books of CA Final (Old as well as New Course) from May-2020.
- In order to expedite the Verification Process of the answer books, efforts are also being made to use technology so that the candidates may get their verified answer books expeditiously.
- The Institute on the basis of feedback received from the students had constituted a High Level Committee. Five meeting of the Committee has been held till date. The report of the Committee is under finalisation and expected to be submitted soon which then will be considered by the Council.
Indian Institute of Insolvency Professionals of ICAI (IIIPI), a wholly owned subsidiary of the Institute of Chartered Accountants of India, established to enrol and regulate insolvency professionals as its members in accordance with the Insolvency and Bankruptcy Code, 2016.
IIIPI continued its lead position with total enrollment exceeding over 1800 members and is the principal IPA with over 62% of the total strength of Insolvency Professionals (IPs) enrolled in its books.
UNIQUE DOCUMENT IDENTIFICATION NUMBER(UDIN)
- Implementation of UDIN
- To curb the malpractice of misrepresentation of Chartered Accountants’ services and forgeries of signatures of CA’s by Non CAs, the ICAI took a historic decision by introducing Unique Document Identification Number (UDIN) which protects the signature of practicing CAs by generating UDIN from UDIN Portal for every Report/Certificates and Documents issued by them. Last year, UDIN was made mandatory for all full-time practicing Chartered Accountants in phased manner.
- Accordingly, from 1st February 2019 and 1st April 2019, UDIN was made mandatory for Certificates and GST & Tax Audit respectively. From 1st July, 2019 onwards, it has become mandatory to generate UDIN for all the documents/certificates/reports/statements issued by full time Practicing Chartered Accountants.ICAI feels proud to conceptualize UDIN pioneering in the World.
- Taking up UDIN with Regulators
- This facility is being widely accepted by various Regulators like SEBI, RERA, IBA, Banks and other stake holders and around 7 lakhs verifications for UDINs have taken place.
- Future perspective
- ICAI envisages that UDIN will be emerging as a regulatory and monitoring tool for better Tax compliance, utilization of Govt. funds under various schemes and effective adherence of ICAI Rules/ Regulations / Guidelines
- In the years to come, apart from developing Indian economy we may use UDIN for data mining for determining ICAI contribution towards economy of the country such as Remittances/flow of money overseas as per FCRA/FEMA and other Acts, Evaluation of GDP growth, Audit observations of auditors etc. Through UDIN, ICAI will come out with yearly MIS reports for the Government and stakeholders on above aspects by data mining.
ACCOUNTING STANDARDS FOR LOCAL BODIES(ASLBs)
- ASLBs help in improving the financial reporting and bringing transparency and accountability in financial operations of Local Bodies in larger public interest which will augment more resources to Local Bodies.
- Following the Robust and consultative process in formulation, as of now, total twenty seven (27) ASLBs have been issued by the ICAI.
- ASLBs issued by ICAI are recommendatory in nature and would become mandatory from the date specified in this regard by the State Government concerned.
- Other Benefits of Accounting Standards for Local Bodies (ASLBs)
- The purpose of ASLBs is to ensure that the financial reporting by local bodies reflects how efficiently and effectively Local Bodies have discharged their responsibilities in using public funds.
- ASLBs will help in standardising accounting policies and principles so the transactions of all Local Bodies will be recorded in a similar manner if they follow ASLBs which will lead to uniformity in financial statements.
- ASLBs lay down accounting principles and methodologies to prepare the financial statements of Local Bodies that mitigate manipulation with the financial data, misrepresentation of financial information.
- ASLBs would enable comparability of financial information which will boost investor confidence, thereby enabling local bodies to raise funds at lower costs. It will provide access to capital markets for raising funds and reduction in the cost of capital leading to overall economic growth.
- ASLBs will assist the decision makers (E.g.: Central/State Governments for releasing grants) to make sound choices based on a more accurate picture of financial performance, position and outlook.
- Made proposals to several State Governments to allow ICAI to implement ASLBs to (accrual based) Financial Statements of ULBs to understand as to the extent their Financial Statements would be impacted in case ASLBs are mandated for implementation.
- ICAI Valuation Standards 2018 are benchmark for Valuation Practices applicable for Chartered Accountants.
- ICAI is a Member of –
- MCA constituted Committee of Experts (COE) to examine the need for an institutional framework and development of valuation profession
- Committee to advise on Valuation Matters constituted by MCA under Rule 19 of Companies (Registered Valuers and Valuation Rules), 2017
- ICAI is also planning to release the Survey Reports of various sectors and industries for MIS purposes for the Government depicting the contribution of CAs to the GDP Index and economic growth of the Country through data mining of UDIN database.