ICAI Doubled Stipend for Articled Assistants with Immediate Effect

In a latest move to serve the cause of our students, the Institute has decided with immediate effect (i.e. 23 January 2015) to double the stipend rates for each of the year payable to the articled assistants pursuing Chartered Accountancy Course. A notification issued in this regard to revise the Regulation 48 of the Chartered Accountants Regulations, 1988, is available on the website of the ICAI at the link http://220.227.161.86/36524council25906-sas.pdf. The stipend rates so revised are as follows:-

This is brought to the knowledge of articled assistants and the principal for compliance thereof

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LEARNING DURING ARTICLESHIP PERIOD: THEONLY GOLDEN PERIOD IN LIFE OF A CA STUDENT

Things CA Students should learn during Articleship

Your Articleship is the golden time of your period as a CA Student. How you go through it will have an impact on what type of CA you are destined to become. Taking your Articleship too seriously or too lightly will have an adverse impact on your training and your overall learning experience. Here I will discuss the 5 conventional things and some basic points regarding it that every Article should learn during his Articleship tenure.

1. Audit- it’s highly likely that the day you join your Articleship, you’ll be sent out for the first phase of an audit called Vouching.

What you should learn

The point here to know is that developing a working knowledge of Standards of Audit, and getting to know the History of Accounting errors and system problems at a particular client’s place can easily benefit you in understanding how things are done in the real life.

2. Accounting- “What’s a Chartered Accountant who hasn’t done some real accounting work” that’s what my Boss said. Simple data entry of client’s can help you understand fundamental accounting concepts better

What you should learn

Familiarise yourself with the two basic accounting software in use- Tally and Busy, however keep in mind both are powerful software and misjudging them for just simple accounting tolls would be imprudent. Both not only offer powerful reporting facilities but also assist in business management. Learning from them you can also develop managerial and reporting capabilities useful in the long run.

3. Communication skills- Although this is stressed upon by CA’s, speakers etc but has been more or less neglected by the masses as most of them chase marks. Know this much that an average CA with good communication skills will fare much better than the topper with poor communication.

How to go about it

Start small, taking initiative such as requesting your principal that he allows you to attend his meetings with the client regarding audit etc can be helpful, or if you’re in the second year you yourself can hold regular meetings and develop communication while discussing your audit related queries etc. You can also go big and take part in ICAI’s student Conventions held regularly throughout India

What you should learn

When you’re in a meeting you should realize the person you’re dealing with holds a vast amount of knowledge regarding his company and matters related to it. If you got a good query but your presentation is bad he can outwit you easily. Have you ever realized that if you’re a practicing CA with the same communication problem, how adversely it can affect you. Start now

4. Dealing with the Babu- One of my all time favourite, your articleship training is not complete until you’ve witnessed the reality of a government office. If you’ve seen the movie “Chala mussaddi office office” then you’ll probably know what I am hinting at. Government offices working at snail paces, double sided drawer’s for easy transfer of bribes, constant running around to submit ITR at the Central Revenue office,  standing in queues for hours and trying to set up an appointment with a higher rank officer for days only to get it after paying 1000 to the peon are some of the things I witnessed during my time.

What you can learn and gain

Your biggest learning will be that you’ll be able to come out of your shell and become a tougher and more confident person. That constant running around will also force you to understand the system and deal with it in a better way. Knowing what to do and how to do it.

5. Take the Chill Pill- Remember that your three years of articleship may be the most important, but they’re not the only three years of your career. Learn when to relax. Some people are unable to cope up with too much work and study pressure all pressing on them at the same time. Also know that you may be asked to go over and above your capacity. While that is acceptable at times, you should know where to draw the line and ease yourself.

Why you need to learn this

Young Indian professionals are the most stressed out lot in the world. Their ambition of money takes a toll on their health, and leads to restlessness, depression, heart problems and many more. Just tell me one thing, what good is that extra money you make when you can’t even be happy with it? Learning this important point and relaxing when you should, during your training, will complete your experience of becoming a successful CA later on.

These are some of the major points to be learnt during Articleship. I may have missed out on a few less important ones as it is these major points that form the core of your learning experience. I would love to hear from you regarding what all you learnt during your Articleship………

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FOREIGN EXCHANGE

With the most busy month of March getting finally over, its time to relax and spend time with your family and go out on a vacation. And if at all you are planning a trip to abroad you might want to do shopping there. What will be the basics you will be doing before going ?

Foreign Currency, yes that’s the most important component of your trip to abroad.

It all started with the failure of Barter system in encouraging trade that currencies came into existence and every country having its own currency to trade. And it is because of this difference in currencies of different nations that the concept of foreign exchange came into existence.

In commodity market you value the items that you purchase in money terms. But in foreign exchange you value money in terms of money but both are of different countries having different currencies. What is foreign exchange? It is the amount of home currency you give to exchange it for foreign exchange.

Foreign Exchange market in short is also called FOREX. It is the most traded financial market in the world. Every trading day over $4 trillion worth of currencies are traded across the world buy Banks, financial institutions and individual investors. The trading week begins from Monday morning in Sydney, Australia and finally closes on Friday evening in New York. There is no central market for currency trading which thus provides the investors with an opportunity to invest 24 hrs a day for a period of 5 days in a week

 In India the forex market is divided into two layers.

Layer 1

This layer consists of the main controllers of forex in India. RBI is the chief regulator of forex in India, along with that FEDAI (foreign exchange dealer’s associations of India) also plays a vital part in making of the rules for the same.

Layer 2

This layer consists of Bank-to-Bank (interbank) and Bank-to-customer(merchant transaction) transactions.

Why do people buy foreign currency?

1. To purchase the items abroad (  e.g. Tourists )
2. For FDI (Foreign Direct Investments )
3. For Gaining  ( By the fluctuations in foreign currency rate )
4. For paying for imports.

How to interpret Forex quotes?

In Foreign exchange market currencies are always traded in pairs that’s because we exchange one country’s currency for another therefore whenever we buy a foreign currency we are simultaneously selling our home currency.

Forex quotes consists of two prices

1. The price at which we can buy the foreign currency (also called as “ASK PRICE” )
2. The price at which we can sell the foreign currency (also called as “BID PRICE” )

ASK PRICE is the price at which the bank is ready to sell us the foreign currency and the BID PRICE is the one at which the bank is ready to buy the foreign currency from us .

Ask price is always greater than Bid price as we are the customers and bank/dealer is the provider therefore we will always buy at the highest of the quote that is the ASK PRICE and sell at the lowest of the quote that is the BID PRICE or put it the other way bank always sells at the highest of the quotes and buys at the lowest of the quotes.

You might have read the foreign currency rates that appear in the daily newspaper in the format as follows

USD/INR

The currency that is placed first is called as the base currency and the other one is called as the     price currency.

So as per the above quote dollar is the base currency and rupee is the price currency

e.g. suppose that the rate quoted by the bank to you is given is in the following form

       USD/ INR = 45.20/45.22

The above given quote is referred to as a two way quote.

This implies that US dollar is the base currency and rupee is the price currency and that the bank is ready to buy dollar from you at the BID PRICE (45.20) and is ready to sell you dollar at the ASK PRICE (45.22)

NOTE: Bid Price is always smaller than Ask price.

Sometimes rate is also given as

Rs / $

In this case the currency at the first position is called as the price currency and the other one is called as the base currency. Hence, Rs is the price currency and $ is the base currency respectively.

e.g. suppose the rate given is

        Rs 45.20 / $

This though is an outdated form of a quotation but implies that for 1 dollar we will have to pay Rs 45.20.

The party that gives the quote is called as the MARKET MAKER

And, the party which takes the quote is called as the MARKET USER

What is the difference between BID RATE and ASK RATE called as?

This difference between bid rate and ask rate is called as ‘SPREAD’

What is Exchange Margin?

Exchange Margin also called EM is the margin that the Market maker earns when we do a transaction with him or her. 

How is the quote decided in case of Bank-to-Customer transaction?

When a customer approaches a bank to buy foreign currency then the bank has to provide him with a quote. For this the bank first checks the quote which is available in the interbank market for its purpose and then adjusts exchange margin in it before giving a quote to the customer. The main activity carried out here is that when a bank buys foreign currency from a customer, it will sell it in the Interbank (IB) market (this is called as squaring off of merchant transaction).

In this way merchant rate is calculated and user bank profit is confirmed in the form of ‘EM’( Exchange Margin) 

e.g. Suppose IB quote is         1 $ =  45.30/45.33 Rs

And you approach your bank to sell 1 $

What should be the quote given buy the bank if it wants to earn 5 paisa profit on the transaction

ANS

Since the bank will buy dollar from you therefore the relevant rate is the lowest of the quote that is 45.30.

Now the bank will adjust its EM in this quote. Now since 45.30 is the price that bank will pay you and will receive the same when it will square off therefore to earn a margin the bank will have to pay you less so it will deduct the margin of 5 paisa from the quote i.e.

For you the quote will be  =  45.30 - .05 = Rs 45.25

   

Hence, the bank will buy from you at Rs 45.25

Similarly in case you want to buy dollar from the bank the calculation will be as foolows

Relevant rate = highest of the quote =  45.33

ADD : EM                                         = 00.05

Total that will be quoted to you         = 45.38

Hence, the bank will sell you at Rs 45.38.

And this is how my friends you get the desired currency

I hope that now you all must have known how the entire things are carried out in foreign exchange.

So next time when you plan a trip to abroad you will be knowing everything that actually takes place when you get your currency converted.


This article has been Authored by RISHABH AHUJA. He can be contacted at: simply_rishabh@yahoo.com

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Working hours of the Articled Assistants prescribed by ICAI

The ICAI has considered the issue regarding the working hours of the articled assistants.Council is of the view that the article training is an important part of the CA course and the same needs to be done in accordance with the scheme framed by the ICAI in this behalf. To clarify the doubts, the Council decided to issue the following directions:-

1. The articled assistants should undergo practical training in accordance with the Chartered Accountants Regulations, 1988 as explained hereinafter.

• The working hours for the articled assistants shall be 35 hours in a week excluding the lunch break.
• The office hours of the Principal for providing article training to the articled assistants shall not be generally before 9.00 A.M. or after 7.00 P.M.
• The normal working hours for the articled assistants shall not start after 11.00 A.M. or end before 5.00 P.M.
• The working hours for the articled assistants should not exceed 35 hours in a week excluding the lunch break and normally an articled assistant be required to work during the normal working hours fixed for articled assistants.
• In case of the exigencies of work with the Principal, an articled assistant may be required to work beyond his/her normal working hours. However, under such circumstances, the aggregate number of working hours shall not exceed 45 hours per week. The requirement to work beyond 35 hours in a week should not be a practice but only in exceptional circumstances. Further, where the articled assistant is required to work beyond normal working hours, and aggregate of such hours exceed 35 hours per week, he/she shall be entitled to compensatory leave calculated with reference to number of completed working hours, over and above, 35 hours per week.

2. During the working hours, the articled assistant is not permitted to attend college/other institutions for pursuing any course including graduation. Accordingly, college timings of such course should not be such (after taking into account the time required to commute) which clashes with the normal working hours of the article training.

3. To ensure that the working hours do not clash with the graduation or any other course, if any pursued by the article assistant, each articled assistant registered on or after 1st April, 2008 shall now be required to obtain specific permission from the ICAI for pursuing graduation or other course as permitted under the Chartered Accountants Regulation by submitting Form No.112, within one month from the date of joining the college or course to the ICAI.

4. The articled assistant presently registered and undergoing graduation or any other course and who have not obtained specific permission shall be required to obtain the specific permission from the ICAI by submitting Form No.112 within six months of issue of these guidelines i.e. by 30th September, 2008. However those students who have already obtained the specific permission by submitting Form No. 112, need not obtain it again and the permission so granted shall continue to be valid.

5. The Certificate in Form No. 112 indicating college timings etc. shall be counter-signed by the concerned Principal of the college with the seal and stamp of the College and also indicating the telephone number/s and full address of the College.

6. In case a student does not comply with the above requirements or violates any of the above guidelines, his/her articleship period shall not be recognised.

Source: ICAI Articleship Guidelines
Source:ICAI

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Exemption for Graduates from CPT in Chartered Accountancy (CA) Course

The Council of ICAI has amended the norms for entry into the CA Profession and has exempted Graduates from appearing for CPT.

The details of the same are shared below:-

(a) Exemption to Graduates/CWAs/CSs from appearing for CPT

Common Proficiency Test (CPT) is now be exempted for the following candidates

(I) Any Commerce Graduates/Post-Graduates who has studied any 3 full papers of 100 marks each out of

1. Accounting
2. Auditing
3. Mercantile Laws
4. Corporate Laws
5. Economics
6. Management including Financial Management
7. Income Tax Laws
8. Indirect Tax Laws
9. Costing
10. Business Administration
11. Management Accounting

and passed the Graduate/Post-Graduate Examination by securing an aggregate of minimum of 55% of the total marks or its equivalent grade from any recognized Universities including Open Universities.

 (II) Any other Graduate/Post-Graduate not falling in the above category (i.e. Non-Commerce Graduates) who has passed the Graduation/Post-Graduation examination by securing an aggregate of minimum of 60% of the total marks in the examination or its equivalent grade from any recognized Universities including Open Universities.

(III) Any Candidate who has passed the Intermediate level examination conducted by The Institute of Cost and Works Accountants of India (ICWAI) or by The Institute of Company Secretaries of India (ICSI). It has also been decided that the above exemption would also be applicable to students who wish to pursue Accounting Technician Course of ICAI.

Provisional CPT Registration for Students pursuing Graduation Course

The students pursuing final year of graduation are also allowed to provisionally register for IPCC but appear for IPCC Exams only after appearing in the final year examination of Graduation Course.

Their provisional registration to the CA Course would be confirmed only after submission of satisfactory proof of their having passed the graduation course with the prescribed percentage of marks.

Commencement of Articleship for Graduates who are exempt from CPT

Those Students (as specified above) who are exempt from appearing for CPT are allowed to commence their Articleship Training immediately without even clearing IPCC Exams

However, candidates passing Intermediate level examination conducted by the ICWAI/ ICSI are allowed to join Articleship only after passing Group I of the IPCC Examination of the ICAI

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The above provisions would come into force only after approval of the Central Govt

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