August 13, 2008
The Institute of Chartered Accountants of India (ICAI) is a statutory body established under the Chartered Accountants Act, 1949 for the regulation of the profession of Chartered Accountancy in India. During its nearly six decades of existence, ICAI has achieved recognition as a premier accounting body not only in the country but also globally, for its contribution in the fields of education, professional development, maintenance of high accounting, auditing and ethical standards. ICAI now is the second largest accounting body in the world.
The affairs of the ICAI are managed by the Council in accordance with the provisions of the Chartered Accountants Act, 1949 and the Chartered Accountants Regulations, 1988. The Council of the Institute at its 280th meeting held on August 7 – 9, 2008 at New Delhi has taken the following decisions.
New Version of Management Representations Standard
The Institute of Chartered Accountants of India is committed to the cause of making the Indian auditing profession globally competitive. In this direction, the Institute has in the past issued auditing standards benchmarked with the internationally recognized auditing standards .The year 2007 saw issuance of a number of new/ revised auditing standards corresponding to the international standards issued by IAASB’s Clarity Project. This project has been undertaken by the IAASB to enhance the understandability of the Standards and make them easier to implement.
The Council of the Institute at its 280th meeting cleared another Standard on Auditing (SA) 580, Written Representations. This Standard too is in harmony with its international namesake issued by the IAASB this year under its Clarity Project. The SA 580 is a revised version of the erstwhile Auditing and Assurance Standard (AAS) 11, Representations by Management issued by the Institute in 1996. The Standard would be effective from April 1, 2009.
The new Standard is quite detailed in terms of the duties and objectives of the auditors with regard to the acknowledgement by the management that it is fulfilling its responsibility relating to preparation and presentation of financial statements and internal controls, the various forms of management representations, situations where management representations are unreliable or where the management refuses to provide requested representations.
New Standards on Internal Audit and Framework of Internal Audit Standards
When the Council of the Institute of Chartered Accountants of India in 2004 established the Committee on Internal Audit, it had a very clear objective in its mind, reiterating the primacy of the Institute in the area of internal audit. Towards this direction, issuing Standards on Internal Audit has been a crucial step. These Standards codify the best practices in the area of internal audit as performance benchmarks for the internal auditors. Till date, the Institute had issued three such Standards.
The Council of the Institute at its 280th meeting cleared four more Standards on Internal Audit. These SIAs relate to important aspects in the internal audit process such as sampling, analytical procedures and reporting. The names of these Standards on Internal Audit (SIA) are SIA- Analytical Procedures, SIA-Sampling and SIA-Reporting and SIA-Quality Assurance in Internal Audit. These Standards are presently recommendatory in nature. In addition, the Council also cleared the Framework for Standards on Internal Audit which would provide a frame of reference for the internal audit standards being issued by the Institute.
Certificate Course on International Financial Reporting Standards
As it has been decided that India would converge with IFRSs with effect from 1st April 2011 for accounting periods commencing on or after that date, the Institute has taken various steps in this direction. The complete road map for the convergence is in place and the process of achieving convergence has also been initiated.
With a view to put in place IFRS-equivalent Indian Accounting Standards well in time, the Institute has prepared a detailed work plan in this regard. While some of the Accounting Standards are virtually convergent with IFRSs, the drafts of 6 revised / new Accounting Standards are also ready. The amendments in the remaining Indian-equivalent IFRSs are expected to be ready by the end of year 2008. This will give ample time to the industry and professionals to prepare themselves to become IFRS-compliant by the target date.
The Institute, through one of its Sub-groups, specifically constituted for this purpose, has already completed the necessary spade work of identifying provisions / requirements of various laws and regulations such as the Companies Act, the Banking Regulation Act, RBI Circulars, the Insurance Act & Regulations and SEBI Regulations & Guidelines in order to make the necessary revisions/amendments. This will be taken up with the relevant authorities with a view to get the law and regulations consistent with IFRS. The concerned authorities have assured all support to ICAI in this direction. This is clearly evident from the recent announcement made by the Ministry of Corporate Affairs, which notifies Accounting Standards under the Companies Act, regarding the Government’s commitment to converge with IFRSs from 1st April 2011.
ICAI recognizes a need to get the professionals trained in some of the new concepts of IFRS such as fair value measurement etc. and therefore it has been decided to formulate a 75 hours Certificate Course on IFRSs which will be of International Standard and will provide in-depth education and training to professionals . The course will be launched in September, 2008 in all major cities of India. Workshops of short duration have been planned to train the faculty to ensure that the training imparted by all units is uniform.
As India is being looked upon as a destination for providing services, the convergence would make this profession truly global. The convergence to IFRS will enable the Indian Chartered Accountants to provide their services at a Global level .This will be another step taken by ICAI towards contribution in nation building.
Setting Up of Singapore Chapter
The Council of the Institute has decided to set up its Chapter in Singapore. This will be the 21st Chapter of the Institute, abroad. Chapters of the Institute are set up to provide a forum for the members of the Institute settled/working there to interact among themselves, organize Seminars and keep themselves abreast with the developments taking place in the fields of Accounting, Auditing and other allied areas globally, besides organizing Continuing Education Programmes for the members. The major objectives/functions of the Chapters abroad are placed at Annexure ‘A’.
SETTING UP AN ACCOUNTANCY MUSEUM
ICAI has envisaged setting up of an accountancy museum in this Diamond Jubilee Year of the Institute. This will trace the history of the Accountancy profession from ancient times and will comprise of rare collection of items including rare documents, photographs, paintings, memorabilia and so on. This collection will be of historic and heritage value from the point of view of the Chartered Accountancy profession in India.
The museum will provide a journey through various stages of glorious past of the CA profession in India and the conception and the growth of the Institute.
It will be a source of inspiration, learning, reference and professional pride for all those who are associated with accountancy profession including the students and members. It will also showcase historic press clippings, mementoes, documents, photographs, paintings, handicrafts, stamps, video shoots, posters etc. related to accountancy profession in India. It is a heritage that needs to be preserved and shared with others.
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