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The Institute of Chartered Accountants of India Established by an Act of Indian Parliament The Chartered Accountants Act, 1949.

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Presentation on theme: "The Institute of Chartered Accountants of India Established by an Act of Indian Parliament The Chartered Accountants Act, 1949."— Presentation transcript:

1 The Institute of Chartered Accountants of India Established by an Act of Indian Parliament The Chartered Accountants Act, 1949

2 Our Mission The Indian Accountancy Profession will be the Valued Trustee of World Class Financial competencies,Good Governance and Competitiveness

3 Profile of ICAI Was set up in 1949 under the Chartered Accountants Act, 1949 even before adoption of Constitution of India in 1950 Since then Profession has grown leaps and bounds in terms of Membership and Student base

4 Profession in India 145K Members spread throughout the country and in different parts of the world Sizeable studentship base Increase in percentage of members joining industry Chartered Accountants are rendering services in every walk of economic life - Politics, Judiciary, Government, Agriculture, Corporate, NGOs Profession is dominated by small firms Increasing trends towards consolidation Government of India looks at ICAI as Partner in Nation Building Technical Standards based on International Standards Focus on Capacity Building in the emerging context

5 Size of Firms Vast majority SMPs with SME clients Cost and time vis-a-vis detailed requirements of Standards We do not believe in separate auditing Standards for audit of SMEs alternative between audit and review likely to create confusion, not much value addition seen w.r.t clients as well as costs and risks involved vis-a-vis remuneration

6 ICAI Profile ParticularsNo. ORGANIZATIONAL Regional Offices5 Branches117 Chapters Abroad18 SPECIAL PURPOSE OUTFITS CPE Study Circle131 CPE Chapters43 Reference Libraries33 Accredited Institutions273 MEMBERSHIP (000) 145 % in Practice53% STUDENTS (000) 520

7 Role of ICAI To regulate the profession of Accountancy Education & Examination of Chartered Accountancy Exercise Disciplinary Jurisdiction Input on Policy matters to Government Ensuring Standards of performance of Members Formulation of Accounting Standards Prescription of Auditing and Assurance Standards Laying down Ethical Standards Continuing Professional Education Financial Report Review Monitoring Quality through Peer Review Conducting Post Qualification Courses

8 ICAI Network Chapters Abroad Abu Dhabi Bahrain Botswana Doha Dubai Indonesia Jeddah Kuwait London Melbourne Nairobi (Kenya) Nigeria Port Moresby (Papua New Guinea) Riyadh Saudi Arabia (Eastern province) Sydney Toronto Zambia Decentralized Offices


10 The Central Council Consisting of 40 Members –32 Elected Members –8 Nominated by Central Government Term: Three years Headed by President –Elected by the Council for one year term Empowered to frame Regulations under the Act and to constitute necessary standing and non-standing Committees

11 Standing Committees Executive Committee Finance Committee Examination Committee

12 Key Non-Standing Committees Committee on Ethical Standards Comm. On Fin. Markets & Investors Protection Direct Tax Committee Accounting Standards Board Auditing & Assurance Standards Board Committee on Insurance & Pension Committee on Accounting Standards for Local Bodies Expert Advisory Committee Research Committee Board of Studies Corporate & Allied Laws Committee Information Technology Committee Committee on Trade Laws & WTO Editorial Board Committee on Corporate Governance Indirect tax Committee Committee on Economic and Commercial Laws Professional Development Committee Continuing Professional Education Committee International Affairs Committee

13 Key Non-Standing Committees - 2 Board of Discipline Peer Review Board Financial Reporting Review Board Committee on Members in Industry Committee on Internal Audit ICAI-ICWAI- ICSI Committee Government Accounting Committee Management Accounting Committee Public Finance Committee Vision Committee Capacity Building Committee Diamond Jubilee Committee Perspective Planning Committee Audit Committee The Institute is responsive to the emerging challenges and constitutes new committees for effectively meeting these challenges Research Unit: ICAI-Accounting Research Foundation

14 Organisation Structure

15 Institute Functions Professional Development Advisory Regulatory

16 ICAI – A Key National Body Offers inputs to Comptroller & Auditor General of India Ministry of Company Affairs, Govt. of India Reserve Bank of India Securities and Exchange Board of India Central Board of Direct Taxes Insurance Regulatory and Development Authority Departments of Central and State Governments Departments of Public Enterprises

17 Profession is aligning itself with changing imperatives Convergence with International Standards of Accounting and Auditing Review and Revision of Education Curriculum. Upgrading skill set in newer areas Facilitating Consolidation amongst Smaller Firms Corporatization for MCS work Recent change in Regulatory Framework Multidisciplinary Firms and LLP on anvil Making CPE mandatory Profession ready for opening up under WTO/ GATS Introduction of Peer Review System, Financial Reporting Review Focus on internet auditing

18 International Presence ICAI is founder member of IFAC, CAPA, SAFA and IIN ICAI represented in : –IFAC - Board, Education Standards Board, SMP Committee, Developing Nations Committee, International Public Sector Accounting Standards Board, Professional Accountants in Business Committee –CAPA – President & Board member –ICAI holds Permanent Secretariat, SAFA –SAFA - Chairmen and member of various Committees and Working Groups

19 International Initiatives ICAI being consulted by IAASB in Audit Standards Setting and by IASB in IFRS setting Playing a lead role in the area of Developing Nations, SMPs and SMEs, International Public Sector Accounting Standards, International Education Standards SAFA adopted ICAI curriculum as model Student exchange programs held with ICAB, ICAP, ICAN and ICASL Opened an Office in Dubai Opened Chapters in Melbourne, Toronto, Port Moresby (Papua New Guinea), Sydney and Oman. Invitation to Institutionalization of Profession in countries like Oman etc. Initiatives for recognition of ICAI qualification by accounting bodies in other countries

20 Important Initiative Undertaken to Align with Changing Economic Order Alignment of Indian accounting standards with IFRSs Alignment of Auditing Standards with International Standards Change in education and training curriculum Launch of Post Qualification Courses Capacity building of firms Mandatory CPE Requirement Peer Review Mechanism Financial Report Review Brand building – Nationally and Internationally Focused approach on issues relating to Corp. Governance. Facilitating changes in regulatory frames. Vigorous pursuance of Mutual Recognition Agreements. Arrangement with Universities for graduation qualification to CA students Facilitating accounting reforms in various areas

21 Examples of Involvement of ICAI in National Organizations Drafting of Income Tax Laws Drafting of Competition Law Drafting of Company Law Capital Market – Development and Regulation Corporate Governance Accounting & Utilization of Governmental resources WTO & GATS Import – Export Policy Commercial and Economic Legislations Non Banking Financial Companies

22 Education and Training Distant Mode of Education Education Through Accredited Institutions and Branches Meets the requirements of international educational pronouncements of IFAC Comprehensive theoretical and practical curriculum Continuous review of the curriculum

23 Highlight of the New Scheme of Education & Training I Common Proficiency Test –Compulsory II3½ years of Practical Training concurrent with components of Professional Competence Examination (PCE) and Final –Complete 100 hours of Compulsory Computer Training before appearing for PCE. –Undergo General Management & Communication Skills (GMCS) after 18 months of practical training and completion of PCE –Eligible to appear for Final Examination on completion of 3 ½ years and passing of PCE

24 Highlights of the New Syllabus Financial Reporting –Corporate Financial Reporting –IFRS based Financial Reporting –US GAAP based Financial Reporting Strategic Management –Study of Business Environment –Understanding Strategic Planning and Analysis –Ability to understand and formulate Functional Strategies Financial Management Advanced Management Accounting Information Technology and Systems Control Business Ethics

25 Examination One of the largest Accounting examination networks Administrative conduct of examination and exam related process largely computerized Exams are held twice a year Examination system considered to be of high standard & integrity worldwide Has been lending expertise to accounting bodies in other countries

26 Accounting Standards Convergence with IFRSs ICAI has decided to converge with IFRSs from accounting periods commencing on or after 1st Aril 2011 for listed entities and other public interests entities such as banks, insurance companies and large-sized entities For smooth transition to the IFRSs, ICAI will take up the matter of Convergence with NACAS, and various regulators such as the RBI, SEBI and IRDA. ICAI would also formulate its work-plan to ensure that IFRSs are effectively adopted from 1st April IFRSs-specific training programs will be organized for its members and others concerned to prepare them to implement IFRSs. IASB has also offered to help the ICAI in its endeavors towards Convergence with IFRSs in India

27 Convergence with IFRSs in India Recognizing the need for convergence in India, Council of ICAI decided to converge with IFRSs from accounting periods starting from 1st April 2011 for: –for public interest entities including listed entities, banks, insurance entities and other large sized entities, –subject to its confirmation by government and other legal and regulatory authorities

28 Strategy for Implementing Convergence with IFRSs in India For Implementing Convergence with IFRSs from 1 st April 2011, ICAI has identified following issues to be resolved: Cooperation from Legal and Regulatory Authorities Level of preparedness of Industry Education and Training of auditors and prepares of Financial Statements Work Plan of ASB for smooth transition to IFRSs Conceptual Issues with IFRSs

29 Constitution of the Group on Implementation of Convergence For resolving various issues, ASB of ICAI has Constituted Group on Implementation of Convergence with IFRSs, which constituted following subgroups: Sub-Group for preparing the Work Plan of ASB and liaising with the IASB Sub-Group for approaching the Government and Regulatory Authorities Sub-Group for liaising with the Industry Associations Sub-Group on Education and Training on IFRSs

30 Auditing & Assurance Standards On the Road to Convergence AASB founder member of IFAC AASs issued based to the extent possible on corresponding International Standards (IS) Chalked out timeline for bridging gap in convergence with IS Standard on Quality Control benchmark with ISA finalized

31 Auditing & Assurance Standards 35 AASs 27 Guidance Notes on auditing issues 04 Industry specific Guidance Notes: * Banking* General Insurance * Stockbrokers* Life Insurance Milestones – AAS 12, Responsibility of Joint Auditors – Statement on the Companies (Auditors Report) Order, 2003 – Study on Money Laundering

32 Research and CPE Commitment to advancement of knowledge in accountancy, auditing, taxation and allied areas Published about 150 Publications Expert Opinions on Applicability of Standards 20 Compendiums over 1000 opinions More than 50 CPE materials published 3000 CPE programs held annually ICAI-ARF to promote research on contemporary issues Publishes a monthly journal with more than 175,000 circulation

33 Professional Ethics Cardinal Principles –Service before self –Extends beyond the legal requirements Some major highlights Prohibition on other occupations Prohibition on solicitation Prohibition on advertisement and Canvassing Prohibition on financial interest in auditee company Restriction on number of audits Limit on fees for non-audit assignments Prohibition on writing Books of Accounts of Auditee company Demarcation between External and Internal Auditors Professional fees for audit and other services received by a firm not to exceed 40% of the gross annual fees of the firm

34 Professional Development Identifying Role of Profession in emerging areas Developing Practice Areas Upgrading and updating the knowledge and skill sets Developing technical material to facilitate practice in new areas Considered as critical in the changed Scenario

35 Quality Control Initiative – Peer Review Peer Review Board of established in March 2002 Focus on: –Technical Standards compliance –Quality of Reporting –Office Systems and Procedures (attestation services only) –Staff training Programmes (attestation services only) 3378 Strong panel of Reviewers maintained 2430 Reviewers have undergone training 1231 Practice units have been issue Peer Review Certificates The Council of the Institute accepted the request of SEBI that audit of listed companies shall be carried out by the auditors who have undergone Peer Review Process

36 Quality Review Board Central Government has constituted Quality Review Board consisting of 11 persons. Council of ICAI has nominated 5 members on QRB Chairman and other 5 members have been appointed by Central Government All services provided by members (Both attestation and non attestation will be subject to Quality Review) Disciplinary action if there is a deficiency in service

37 Peer Review Peer Review Board established in March 2002 Reviews by Board to ensure –compliance with technical standards; and –existence, compliance and adherence to quality control –policies and procedures Findings would not have any relationship with the disciplinary proceedings

38 Financial Reporting Review Financial Reporting Review Board constituted in 2002 to review general purpose financial statements of certain enterprises Boards findings would form basis for : –initiating action against auditor concerned; and –informing irregularity to relevant regulatory authority Board seeks general purpose financial statements of top 500 companies in India on yearly basis

39 Code of Ethics PARTICULARSICAI CODEIFAC CODE (a)ApproachRule based.Principle based (b)FrameworkBased on legal framework as per CA Act, Conceptual framework based on general principles. (c)AuthorityAuthority founded in specific Statute.It suggests basic principles in modular form along with examples without any statutory authority. (d )EnforceabilityInbuilt mechanism for its enforcement is in place. Professional Accountants to see enforceability themselves.

40 New Initiatives Establishment of Accounting Standards Interpretation Sub- Committee Launched the Virtual Institute Project providing e-services to members and students Cap on fee for rendering services other than audit Disciplinary mechanism framework Recast professional curriculum Bridging the expectation gap Common logo for the profession Networking of Firms

41 ICAI - Virtual Institute Virtual Institute integrates all the regions and offices to present a unified view of the operations of the entire Institute through a single integrated enterprise system It FULFILLS the members and students right to convenience, comfort and make the benefits of Information Technology (IT) available to the members and students for rendering the Institute services online anywhere-anytime With this all operational functions of the institute have been brought onto a common intranet with seamless flow and availability of information Towards Tomorrow Today –ICAI started IT initiative towards a bright future and is in it today ICAI Portal is effectively used to make a repository of information and knowledge accessible to the members, students and employees at the click of a button. The portal brings dynamic features to the content. It functions as a Global Gateway to ICAI. The portal provides a single interface to users for accessing Institutes services taking into consideration security requirements.

42 The Institute of Chartered Accountants of India [Set up by an Act of Parliament] ICAI Bhawan, Indraprastha Marg, New Delhi – Phone: , Website:

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