ICAI President’s Message – October 2022

Dear Professional Colleagues,

The future depends on what you do today.”- Mahatma Gandhi

As I pen my thoughts for this communication, I recall the vision and virtues of Mahatma Gandhi, the Father of the Nation whose birth anniversary is on 2nd October. He symbolised truth, simplicity, conscience and ethics. The accounting profession with its service driven leadership and nation first approach has been making significant contribution in ensuring inclusive growth and development of our country.

As we talk about building a self-reliant India, it is the power of knowledge that will lead the development backed by research and innovation driven mindset. Over the years the profession has carved its brand equity as a trusted partner in its conventional roles, however it’s time that the profession upskill itself to adapt to the changing business milieu. The Digital era is very dynamic and to uphold the elements of credence and assurance in financial reporting, we must adopt new ideologies, technology and practices to augment the quality of our services. Being technologically ahead is essential for the profession in the digital paradigm not only to realise the potential of technology for value creation but also mitigate its risk and perils. Therefore, it’s our constant endeavour as an Institute to keep our members ahead of the learning curve to enjoy the trust of the stakeholders and be the trustee of public interest.

Let me share some of the significant professional developments that have taken place since my last communication:

Standards on Internal Audit (SIAs)- Codifying Best Practices

The Institute of Chartered Accountants of India (ICAI) has always played a pivotal role in the Nation’s Standard Setting Framework. In order to keep abreast with the changes in the dynamic business environment, ICAI has been updating the existing Standards & bringing out new Standards on Internal Audit. These SIAs will go a long way in improving the organizational processes & Audit Quality. This shall also escalate the performance benchmark for Internal Auditors.

The Institute has initiated the process of revising Standards on Internal Audit (SIAs) making them principle-based. Revised SIAs are classified and numbered in a series format. Now, six more SIAs providing guidance on important areas are being issued by the Institute. The subjects covered are Risk Management, Internal Auditing in an Information Technology Environment, Third Party Service Provider, Governance, Compliance with Laws and Regulations, and Communication with those Charged with Governance.

Formation of SRO for Social Stock Exchange

The Council of ICAI recently approved the formation of Self-Regulatory Organisation (SRO) for the social auditors as envisaged in the SEBI notification dated 25th July, 2022. The SRO is proposed to be named as “Institute of Social Auditors of India” and will be set up as a Section 8 company under the Companies Act, 2013, under the aegis of ICAI.

ICAI has decided to form the company with the vision to be a leading institution for the development of an independent, ethical, and world-class Social Auditors’ profession responding to needs and expectations of the stakeholders. The proposed SRO will focus on capacity building of social auditors through continuous professional advancement with a focus on adherence to the highest ethical standards and compliance with the letter and spirit of social stock exchange requirements.

Propagating Research and Academics – Bhumi Pujan Ceremony of CoE, Kolkata

The Hon’ble Governor of West Bengal and Manipur, Shri La. Ganesan was the Chief Guest at the Bhumi Pujan Ceremony of the Centre of Excellence (CoE) Kolkata on 4th September, 2022 in the presence of many Council Members and dignitaries. The CoE would be an academic and research hub with a capacity to handle about 500 students and other professionals. The building would be a Green one with a state of art IT infrastructure, a well-stocked digital library and all modern amenities inside the campus. The CoE would be of immense benefit to members and students in Eastern India.

Launch of Six ICAI Representative Offices in the United States of America

Enhancing our global footprints and to position the ‘Indian Accountancy Profession’ as a ‘Brand’ worldwide, ICAI launched 6 Representative Offices in the United States of America at Arizona, Austin, Los Angeles, Michigan, North Carolina, and Ohio at an event “Unite in America” organized by our San Francisco Chapter. The grand launch was held on 5th September, 2022 at San Francisco in the august presence of Chief Guest CA. Piyush Goyal, Hon’ble Union Minister, Guest of Honour Mr. Taranjit Singh Sandhu, Hon’ble Ambassador of India to the United States of America, Special Guest Dr. T V Nagendra Prasad, Hon’ble Consul General of India. I and CA. Aniket Sunil Talati, Vice President ICAI attended the event virtually. The Overseas Representative Offices now number 33 in addition to 44 Overseas Chapters.

Improving Audit Quality

From 1st of April 2023, the Chartered Accountant firms auditing any listed entity or a banking company or an insurance company will have to compulsorily assess their audit quality maturity using the AQMM rev v1.0. The AQMM v1.0 had been launched as a self-evaluation model in July 2021 whereby the firms were recommended to undertake the evaluation. It has been decided that the scores and the level obtained using the AQMM rev v1.0 shall be reviewed by a peer /AQMM reviewer and thereafter the level of the firm shall be hosted on the website of the ICAI alongside the details of the peer review certificate. The AQMM is an amalgamation of a well-researched set of Audit Quality Indicators (AQIs) developed under the aegis of the Centre for Audit Quality. It not only helps the firms to arrive at their current maturity level but also provides a mechanism for helping and guiding the firms for improving upon their audit quality by identifying the strength/ improvement areas. The firms can develop a road map for upgrading to a higher level of maturity based on the scores obtained using the model. I am confident that the firms would find the model beneficial to further improve the audit quality.

New Scheme of Education and Training

The Council, after deliberating at length on the suggestions received from stakeholders, approved the Proposed Scheme of Education and Training with certain modifications. The Scheme so approved by the Council has been submitted to the Ministry of Corporate Affairs, along with the corresponding amendments in Regulations for final approval. With active participation of a range of stakeholders and deliberations at meetings of Board of Studies and the Council, we are sure that the resultant outcome, namely, the New Scheme of Education and Training with its value added features, would develop global Chartered Accountants with high level of professional skills and ethical values.

ICAI Sustainability Reporting Awards 2021-22

With a view to recognising initiatives of businesses with a transformative contribution to the 2030 Agenda for Sustainable Development as well as benchmarking global best practices in Sustainability Reporting, the ICAI through its Sustainability Reporting Standards Board had instituted “ICAI Sustainability Reporting Awards” in the year 2020-21. The ‘ICAI International Sustainability Reporting Awards’ was started to recognize and award exemplary entities for outstanding contribution to SDGs which have led initiatives towards Gender Equality and Climate Change and have implemented efficient and innovative sustainable practices.

Taking the legacy forward, the ICAI has launched “ICAI Sustainability Reporting Awards” and “ICAI International Sustainability Reporting Awards” for the year 2021-22. The last date of receipt of Applications for both the awards is 31st October, 2022. I am sure more and more organisations will come forward and participate.

MoU with PIBR & CAAR

ICAI has signed an Memorandum of Understanding (MoU) with the Polish Chamber of Statutory Auditors (PIBR). The MoU between ICAI and PIBR, Poland, is expected to strengthen our presence in Europe by providing prospects for the ICAI Members to get professional opportunities in Poland. The aim of MoU is to work together to develop a mutually beneficial relationship for the members of ICAI and PIBR.

ICAI has also signed an MoU with Chamber of Auditors of the Republic of Azerbaijan (CAAR). The MoU shall strengthen cooperation in areas of mutual interest promoting accounting profession by way of knowledge transfer through joint programs and research initiatives.

The total number of MRAs and MOUs entered into by our Institute with global bodies are now 23.

World Congress of Accountants (WCOA) 2022

We are excited and eager as the dates for the “Olympics of the Accountancy Profession” approaches. I urge all of you to attend the WCOA 2022 in large numbers and make use of this unique opportunity to interact and network with the largest conglomeration of global accounting and finance professionals. We are making wholehearted efforts to make WCOA 2022 a grand success.

In this regard, recently I met Shri Tarun Bajaj, Revenue Secretary and Secretary MCA and Shri Sanjeev Sanyal, Member Economic Advisory Council to the Prime Minster to extend them invitation for the World Congress.

I am pleased to inform that we are receiving overwhelming response from delegates worldwide and till date we have received registrations from more than 80 countries of the world. We are elated to have the presence of a galaxy of eminent speakers, visionaries and thought leaders. I request the Membership to make full use of the opportunity to learn from the best in the industry and upskill yourself with the latest in trend and technology.

Proposed Revision of Empanelment Norms for Government Audit

The O/o C&AG is in the process of revising the empanelment norms of CA Firms and Criteria for Allotment of Audit. The proposed norms as received from the O/o CAG were discussed threadbare and a series of meetings were held at the Institute.

Based on the deliberations, ICAI submitted its suggestions to C&AG at a meeting of “Audit Board for Central Public Sector Undertakings’’ organized by the O/o C&AG on 6th September 2022 wherein the various regulatory counterparts were present. Shri Girish Chandra Murmu addressed the inaugural session. Various issues related to Revision of Policy for empanelment of Chartered Accountant firms by Office of the C&AG for allotment of audit and need for enhancement of Audit fee/ remuneration of statutory auditors were discussed. It was proposed by the O/o C&AG that additional qualitative parameters should be introduced as part of Allotment Criteria.

MSME Yatra

The ICAI MSME Yatra, an ambitious initiative to support, facilitate and respond to MSMEs was flagged off on 18th August, 2022 from Mumbai. The initiative aspires to promote the spirit of entrepreneurship amongst MSMEs as well as support MSMEs in improving their productivity through innovation and by way of use of various government schemes. MSME Camp is also organised, wherein the Grievances raised by the MSMEs are resolved in realtime basis and real time Udyam registration of MSMEs also facilitated through ICAI MSME Setu. Since its launch, the MSME Yatra has covered 39 cities. Under the initiative, awareness is being created towards capacity and competence building of MSMEs for catalyzing the growth of the sector to boost job creation and development of economy. The Yatra has received very positive response from the various State Governments and the events at various places were attended by State ministers, Local Members of Parliament & Members of Legislative Assembly. The ICAI MSME yatra programme at Shimla was graced by Shri Rajendra Vishwanath Arlekar, Hon’ble Governor, Himachal Pradesh as Chief Guest on 21st September,2022.

In Conclusion

As we approach the 21st World Congress of Accountants, the Theme – “Building Trust, Enabling Sustainability” touches my mind and heart as Trust is so important for a profession to be respected. In an article titled “Building Excellence with Integrity, Trust and Transparency” written in July 2022 issue of “The Chartered Accountant”, Former President of our Institute, CA. Y H Malegam writes that “Success cannot be measured by mere size, whether of membership, practice or profits. It can only be measured by the respect we command”. Respect and dignity are the two words which are prominent in the Dictionary of a Chartered Accountant.

I extend my best wishes to all, as we enter into season of festivals. Let us celebrate these moments of joy, spreading the message of positivity, peace and love.

Best Wishes

CA. (Dr.) Debashis Mitra
President, ICAI

Kolkata, 23rd September, 2022

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