Dear Professional Colleagues,
Prudent corporate governance practices are always the backbone of development and progress of economic ecosystem of any country. After globalisation and liberalisation were introduced to the largest democracy of the world, international businesses looked at India with a new perspective and exploited untapped and immense potential of Indian markets. Changing ownership structures, wide base of shareholders and greater expectations of society further heightened the need of good governance and enhanced the role of accounting profession. A couple of financial irregularities, led the policy makers to rethink their strategies, strengthen regulatory environment by aligning with international developments and bring changes in the system of corporate governance for better. In a major overhaul, SEBI introduced clause 49 of the listing agreement that brought several governance shifts in a company’s functioning. Under the overall guidance of Ministry of Corporate Affairs, mandatory and voluntary codes were introduced, to be followed by companies, that are related to board of directors, audit committees, whistleblower policies and disclosures on related party transactions. The businesses are part of society and need to work for the society. The Companies Act, 2013 brought several exemplary changes in the direction of good corporate governance in the country. The Companies Act, 2013 casts fiduciary duties on
the Directors of a Company to promote the objects of the company for the benefit of its members as a whole, and in the best interests of the company, its employees, the shareholders, the community and for the protection of environment.
With principled purpose, keen-eyed allround observation and implementation of a host of decisions, the Institute of Chartered Accountants of India always work towards indispensable and integral elements of responsible corporate governance in the country with the encouraging accounting profession. The Institute of Chartered Accountants of India, consistently endeavoured to uphold the values of uncompromisable honesty and credible transparency in order to propagate ethical corporate governance in all forms and facets. ICAI firmly believes that authority is a concept not centric to absolute power but strongly intrinsic of constructive influence. Submitting to regulations and abiding by code of conduct without deceit, deception or duplicity ensures consistent strides on the path of inevitable success. Proper corporate governance guarantees individualistic and societal prosperity by circumventing losses and evading financial debacles.
Governance with Sustainable Development
It is beyond an iota of doubt that the corporate reporting needs to capture all relevant information about organisations – what are they doing, how are they performing, and what values additions they have made. While good financial reporting is already being done through established systems, the investors, society and government today aspire much more. Various stakeholders are looking for deeper insights about the performance, risks, longterm prospects and report on creation of sustainable values that conventional financial reporting processes are not expected to deliver.
Over the past decade there have been several developments at international levels that have highlighted need for businesses to be sustainable and more responsible. In line with the Sustainable Development Goals of United Nations, International Federation of Accountants has set an agenda for sustainable development. The Sustainable Development Goals provide a common framework for governments, business, and others to address systemic, interconnected development challenges covering poverty, inequality, climate change, peace and justice. In recent times, India apart from getting robust laws and regulations in place, has been taking a number of initiatives to support the cause . MCA urges businesses to actualise nine principles as part of Guidelines on Responsible Business Conduct and act in a socially, environmentally and economically responsible manner.
- Principle 1: Businesses should conduct and govern themselves with integrity, and in a manner that is ethical, transparent, and accountable.
- Principle 2: Businesses should provide goods and services in a manner that is sustainable and safe.
- Principle 3: Businesses should respect and promote the well-being of all employees, including those in their value chains.
- Principle 4: Businesses should respect the interests of and be responsive to all its stakeholders.
- Principle 5: Businesses should respect and promote human rights.
- Principle 6: Businesses should respect and make efforts to protect and restore the environment.
- Principle 7: Businesses, when engaging in influencing public and regulatory policy, should do so in a manner that is responsible and transparent.
- Principle 8: Businesses should promote inclusive growth and equitable development.
- Principle 9: Businesses should engage with and provide value to their consumers in a responsible manner
I urge our members to keenly encourage the business community to follow these principles and work towards improving sustainability. Looking into the requirements, the ICAI also established Sustainability Reporting Standards Board this year to have a focussed framework. ICAI consistently attempts to release high quality standards and cultivate integrity and ethical conduct among all stakeholders. ICAI endeavours to stay up-todate with the ever-altering world we live in and ensure the accountancy profession never ceases to grow, evolve and deliver for overall good. ICAI has always encouraged its members to stay in sync with the dynamic world around us and periodically replenish their wells of knowledge in order to derive perennial success and push for greater progress.
Setting Global Footprints
The Institute envisions an intricately fraternised world linked together by the common object of global economic development via alliance of formerly isolated skills and collaboration of independent resources for an interdependent cause. After all, Martin Luther King Jr had once said “We must learn to live together as brothers or perish together as fools.” By conglomerating assorted strengths across the world, we can harness a universal invincible power that holds the potential to usher in a new era of global success. ICAI has over the years pioneered innumerable steps to unify efforts internationally towards the building of one global village. As a founder member of International Federation of Accountants and other key global and regional organisations, ICAI has been consistently working to shape the profession at global level by participating in their key activities. ICAI also enters into Mutual Recognition Agreements or have Memorandum of Understanding with the foreign Institutes to facilitate development of accounting profession. It is heartening that Union Cabinet has given its approval for two new agreements with foreign accounting bodies.
Mutual Recognition Agreement with Malaysian Institute of Certified Public Accountants (MICPA)
The Union Cabinet chaired by the Prime Minister, Shri Narendra Modi has approved the Mutual Recognition Agreement (MRA) between the ICAI and MICPA to enable appropriately qualified Chartered Accountant members of either Institute to join the other Institute by receiving appropriate credit for their existing accountancy qualification. For the purpose, ICAI and MICPA would enter into an arrangement to recognise qualifications through specific module of papers and determine the basis upon which admission to membership of appropriately qualified members of the other body may occur. The proposed MRA will provide opportunity to both the Institutes to play the leadership role in addressing new challenges facing the profession in a globalized environment.
Memorandum of Understanding with the Certified Practising Accountants, Papua New Guinea (CPA PNG)
The Union Cabinet has also approved MoU between ICAI and CPA PNG to work together in capacity building and strengthening the Accounting, Financial and Audit Knowledge base in Papua New Guinea. The two institutes will also establish possible cooperation and collaboration in the areas of corporate governance, technical research and advice, quality assurance, forensic accounting, continuing professional development and work on other subjects of mutual interest. The two organisations will have student and faculty exchange programmes and also share professional information and develop modules for specific subjects for CPA, PNG Examination. They will also offer short term professional courses in the domain of accounting, finance and audit in PNG.
MRA Signing Ceremony with the ICAN
While we continue to explore new jurisdictions and territories for creating further opportunities for our members, we are also focusing on strengthening existing tie-ups. It gives me immense pleasure to inform you about the historic occasion of signing of the MRA between the Institute of Chartered Accountants of India and the Institute of Chartered Accountants of Nepal held recently in virtual mode. Virtual, being the new normal, pandemic has not been able to restrict the commitment and the dedication of both the Institutes to serve towards the commonality of interests of the profession at either end. ICA Nepal came into being in 1997 with the support of ICAI and the first formal MoU was signed in 1998. With this collaborative agreement is in place, now members of the either Institute can take up the membership of the other respective body. Besides Presidents and Vice-Presidents of both the Institutions, the ceremony also witnessed gracious presence and address of Shri Hom Prasad Luitel, Counsellor of Nepal Embassy in India; Shri Kapidhwaja Pratap Singh, Second Secretary in Indian Embassy in Kathmandu and Joint Secretaries from Government of India, CA. Mahaveer Singhvi, MEA and Shri Manoj Pandey, Joint Secretary MCA.
We Care – A Unique Social Security Scheme
The raging pandemic is unprecedented to our generation severely affecting the physical movement and many activities. With our constant endeavours, we are able to reach and connect with the different segments of our membership be it in practice, industry, public service, entrepreneurship or women. In this direction, one of our important segments is Senior CAs (75 years and above) having different stature, requirements or expectations. With a view to support this valuable segment of our fraternity, we have recently launched a scheme “We Care – A Unique Social Security Scheme and Benevolence Program for Senior CAs” which endeavours for providing continuous engagement, care and support of the Profession to them creating a sense of belongingness. The Scheme was launched at the august presence of Shri Arjun Ram Meghwal, Hon’ble Minister of State in the Ministry of Parliamentary Affairs, and Heavy Industries & Public Enterprises who highly appreciated this initiative and mentioned that it is the need of the society.
New Portal for CABF
ICAI constantly endeavours to use more and more technology to provide ease of service delivery experience to our stakeholders. Chartered Accountants Benevolent Fund (CABF) is one of the important initiatives of the ICAI providing support to the members/family in the time of need. With the launch of the CA Benevolent Fund Portal (cabf.icai.org) recently the process has been fully automated for providing financial assistance under CABF with provision to upload all relevant supporting documents. Further, portal will also enable online payment of contribution and autogeneration of receipt. I am sure with this technology platform, we will be able to provide support to our fraternity in a more prompt and transparent manner.
Waiver of Condonation/Late fee
I further wish to inform that considering the hardship faced by the students, article assistants, members and firms due to COVID-19 pandemic, we have further extended the waiving-off of the condonation fee for late filing of various application forms relating to students, articled assistants, members and firms till December 31, 2020.
Working for the Well-being of the Students
The Institute implemented a new scheme of education and training from 1st July, 2017. In the scheme, a student who has appeared for class XII examination may register for the Foundation Course after passing class XII examinations and after completing a minimum of four months study period, student may appear for the Foundation Examination. It was observed that a student who is typically appearing in class XII examination in the month of March and getting his results in the month of May, loses out one academic session if he decides to join CA course. This was a crucial loss to the students aspiring to join CA course at an early age. With the prime objective to develop the requisite skill sets for budding Chartered Accountants and enrichment of their professional skills, and also to mitigate above hardship it was proposed to allow provisional registration to the students in advance and start preparing for the Foundation Course. It is heartening that the Competent Authority has conveyed its approval on the ICAI proposal for amending the Regulations 25E, 25F & 28F of Chartered Accountants Regulations, 1988 which now enables candidate to provisionally register in the Foundation Course of the Institute of Chartered Accountants of India (ICAI) after passing Class X examinations. Accordingly, a student has to register with the Board of Studies of the Institute on or before 1st day of January or 1st day of July for the examination to be held in the months of May/ June or November/December, respectively. This will help the students to prepare for Foundation course while pursuing Class XI & XII, and thus students would have ample time to update their knowledge and acquire requisite techniques to appear and pass CA Foundation.
An integral constituent of growth and development of mankind is the progress in the trade and commerce. Mankind has come far and away from the yesteryears to move ahead in the times witnessing changes unimaginable. From barter to cashless – changes are many and in last couple of decades their intensity and swiftness has only increased exponentially with no stoppage, and who would want growth and development to stop. The presence and growth of business are themselves strong justifications of the importance of economic activity. The nations and society never lose their focus on the business and economic growth, come what may. Even in these challenging times, in the midst of social distancing, nations across the globe have kept the economic matters at equitable footing, when considering matters related to health and well being of their people. For challenges of today cannot be allowed to stifle and jeopardise our tomorrow.
On this note, I would like to conclude with warm greetings on upcoming festivities.
Stay safe and healthy.
Jai Hind, Jai ICAI,
CA. Atul Kumar Gupta