ICAI President's Message - July 2013

President's Message - July 2013 - (28-06-2013)

Dear Friends, It’s 6.18 in the morning. After getting back from a small walk, I had my first tea that is usually minus sugar and milk. My newspapers have been delivered. As I start reading some of them, I realise: Few more days and June will be over. July is ready to dawn in. July as a month has a lot of associations for all stakeholders of accountancy profession. Our alma mater had been established by an act of the Parliament on July 1, 1949. We celebrate because the coveted accountancy profession  was institutionalised in July. This could take place only because strong  efforts were put in by our forefathers on every front of our dear profession.  Our profession was accepted by the Govt. of India. Imagine, our Institute  was set up even before our country had its constitution in place. Since the  introduction of the Companies Bill in 1913, we have been struggling very hard and putting in voluminous efforts in order to streamline the  intricacies in accountancy profession, levelling disparities at various levels. Very few of us today know that, till 1949, technically speaking, there  were actually very few chartered accountants. There were various  designations in profession-RAs (Registered Accountants), Approved  Accountants, Incorporated Accountants, GDA (Government Diploma in  Accountancy)-besides the existence of Chartered Accountants who had their education from one of the five chartered societies from UK, e.g. The  Institute of Chartered Accountants of England and Wales and The  Institute of Chartered Accountants of Ireland. To remove this distinction  from the professional makeup of our forefathers, a group of accountants  started a war for dignity, since not just Chartered Accountant designates but the industry too thought very high and superior of the chartered  designation. That too, when skill-wise, accountants trained and educated in India were no less competent than their UK counterparts. It was the  joint efforts of our accounting forefathers and extensive discussions and  debates put up by the Government of India officials, enthusiast public  advocates, thoughtful political leaders and representatives, etc., in the  Legislative Assembly on March 23, 1936, with which our forefathers  started their struggle for equality in professional standing. Then in  the 18th meeting of the Indian Accountancy Board, it was decided to  designate all accountants of India as chartered accountants. Since  then, The Institute of Chartered Accountants of India took over the  responsibility to train that class of noble professionals. This is the time to recall the great endeavours of our accounting  forefathers and pay our sincere tribute to them. The month of July gives  all of us a reason to recall their contributions. Friends! Let us not forget  that we have a solid heritage as gifted by our strong and competent  accountancy professionals. Let us continue the tradition and keep on adding  glory to that heritage. Now let me apprise you on some of the major developments in the  last one month concerning the accountancy profession: Importance of SA 700 (Revised) I wish to record my appreciations for the members, including auditors of  companies, auditors of banks and its branches and auditors of insurance  companies, for complying with the requirements of the SA 700 (Revised),  Forming An Opinion And Reporting On The Financial Statements for the  audit reports for FY 2012-13 and onwards. I also wish to place on record my  appreciations for the regulators and the industry, who have whole-heartedly  supported the change to this new auditor's reporting format. At this juncture,  Compliance with the Standards on Auditing issued by ICAI, being mandatory in  application, ensures a high-quality audit. In particular, the SA 700 (Revised) is  aimed at reducing the expectation gap among the readers to the responsibilities of the management vis-à-vis the auditors. For the benefit of the readers, the  Standard not only requires that headings be given to the various sections  in the auditor’s report, it also requires separate presentation of auditor’s  opinion on the financial statements vis-à-vis auditor’s opinion on other  legal or regulatory reporting requirements so that both are clearly  distinguishable. Since the SA 700 (Revised) is in effect now, I urge all the  members signing audit reports to ensure compliance with the Standards. MoU for Women Chartered Accountants We have recently entered into an MoU with the “Avinashilingam Institute  for Home Science and Higher Education for Women”, Coimbatore, i.e., a  deemed university for women, to facilitate our women chartered accountants having three-year experience to pursue PhD programme as both full-time  and part-time candidates. Vice-Chancellor of the Institute Dr. Sheela  Ramachandran was at ICAI in New Delhi to sign the MoU. Our past-President  CA. T. S. Vishwanath was also present. This brings the tally of the institutes  to 100 (93 Universities, 6 IIMs and IIT Madras), which have recognised  chartered accountants as eligible for pursuing the PhD programme. The  CA qualification has been treated as equivalent to postgraduate degree in  commerce or allied disciplines. Contributions to CABF From the office of accountancy profession, it is quite satisfying to acknowledge before our stakeholders that, during February- May 2013, we have received  60, 11,996 as contribution in the Chartered Accountants Benevolent Fund (CABF),  out of which  11,56,996 was received as voluntary contribution. We have  already extended a sum of  50,76,500 as financial assistance to the families of deceased members of the Institute during this period. It is essential that  our CABF continues to receive funds in order to extend help and assistance to  our members in crisis. I would request all our members to make generous  contributions and also encourage other members to donate to the fund. Inappropriate Response to Tenders It has been observed that some members quote abnormally low fee while  responding to tenders, which gives birth to a suspicion over the seriousness  and quality of their delivery. We had decided in 2010 that if there is a huge  (abnormal) difference between the lowest quote received against a tender  (on which the tender is ultimately allotted) and the next lowest quote,  then peer review of the said assignment and/ or concerned chartered  accountants/CA firm thereof can be ordered. The Council later had decided  in December 2010 that a cost-sheet be maintained by members of the  Institute responding to tenders and accepting professional work, incorporating  the details of cost, personnel, hours, etc., which the Institute may call for  and refer to for various purposes. I will urge our members to keep these  decisions in mind while responding to a tender. Rising Membership and Student Strength I am glad to inform you that the total membership strength has gone up  to 2,18,233 as on May 22, 2013, from 1,92,513 as on April 1, 2012.  There is an addition of 25,720 new members showing a phenomenal  growth in membership strength by 13.36%. Further, it is again a credit  to our profession that an incredibly large number of students, i.e., 11,11,267, have registered with us, out of which we have about 6,09,150 under CPT,  about 3,08,400 under IPCC, about 24,130 under Intermediate (IPC) Direct  Entry Scheme, and about 1,69, 600 in final. Five New Branches in CIRC, NIRC and WIRC I am happy to acknowledge before our stakeholders that we have notified  the setting up of Sikar Branch of CIRC in Sikar District of Rajasthan  (with jurisdiction as Sikar, Khandela, Losal, Palsana and Ringas), Sirsa  Branch of the NIRC in Sirsa District (with jurisdictions as Sirsa, Ellenabad  and Kalanwali), Rewari Branch of NIRC in Rewari District of Haryana,  Nanded Branch of WIRC in Nanded District of Maharashtra, and Dhule  Branch of WIRC in Dhule District of Maharashtra (with jurisdictions as  Dhule and Dondaicha). With the increased reach, members of these  places would find increased reach beneficial to them. With this addition the  total number of branches is now 138. e-Sahaayataa As all our stakeholders know, we had introduced an online grievance  management system of the Institute, e-Sahaayataa, to address the queries,  complaints and grievances of our stakeholders pertaining to the day to  day working of the Institute. Grievances are being expeditiously catered to and are being resolved. I am really happy to see the overwhelming response  and appreciation of this system by one and all. We receive queries, complaints and grievances, and resolve them within the stipulated  time-frame. However, credit for the success of this system goes to the  cooperation of our stakeholders. The system has become all the more  refined and evolved over the time. We look forward to your continued support  and to serve you better. I call upon all the members to use e-Sahaayataa for  their queries. Industrial Training for Articled Assistants Articled assistants who pass Intermediate (Integrated Professional  Competence) Examination/Intermediate (Professional Competence)  Examination/Professional Education (Examination-II)/Intermediate  Examination may serve as an industrial trainee in any of the financial,  commercial or industrial undertakings, as approved by the Institute, under  an eligible member of the ICAI working in that organisation. I would request  all members to encourage their final-year articled assistants, who  have passed Intermediate (IPC) Examination in entirety, to pursue industrial  training for 9-12 months. Other details including application form and the  list of organisations permitted to impart industrial training are available on  the Institute’s website. Concerned regional offices of the Institute may also be contacted in this regard. More Branches to Hold GMCS/ Orientation Programmes We have extended permission and approval to 11 new branches against their  request to organise Orientation Programmes and/ or GMCS Course. We  have approved Alleppey, Hubli, Sivakasi and Pondicherry Branches for GMCS  from Southern Region; Aligarh, Meerut and Ratlam for GMCS, and Bhavnagar  for Orientation Programme and GMCS from Central Region; and Karnal, Sangrur  and Panipat for GMCS from the Northern Region. Members should inform the  articled trainees/students about the new centres and encourage them to  undergo the respective courses at the earliest. Examinations May 2013 examinations have been fairly conducted across all centres except  for an untoward event where we have initiated the disciplinary process against the persons responsible. Fair examinations strengthen the essence  that accountancy profession communicates to our society and nation at large.  We represent our alma mater in everything we do as members of ICAI. It  becomes mandatory for us to act sincerely and responsibly while carrying out  all our professional work. ***************** We all like early monsoon which brings relief to the earth from the heat of  summer. But this time, it has brought along a serious crisis to the people in  some regions of our nation. As a result of torrential rains and a series  of flash floods, landslides and cloudbursts, thousands of people, including  locals and tourists, are stranded, thousands are missing, and several villages have been washed away. The extent of human loss is beyond estimate. It is a  trying time for all of us. At the least, I request my professional colleagues to contribute generously for this cause. Either individually or in group, we will find out a way to help those affected by the natural calamity. Celebrated coach Celestine Chua quite responsibly remarks: The degree of  responsibility you take for your life determines how much change you can  create in it. He goes on to say: The more you take responsibility for your past  and present, the more you are able to create the future you seek. Besides  what the nature has done, if we contemplate on the reasons, we will  find that this is also because of ecological instability that we have caused  through severe forest depletion and unplanned housing projects. The  C&AG had warned of the ecological hazard in these sensitive regions.  Growth at the cost of the existing resources  is never advisable. There are things of our concerns and there are not. But being members of the same nation, we have to own up certain responsibilities that are beyond our  purview at times. Martin Luther King rightly advises: You are not only  responsible for what you say, but also for what you do not say. While we have professional responsibilities of our own, we will have to share  the national responsibilities. Let us be responsible to our time and our society. Best wishesCA. Subodh Kumar Agrawal President, ICAI New Delhi, June 24, 2013 Please Post Your Views Here President's Message - Archives

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