My Dear Professional Colleagues,
A few days back, the 75th Independence Day was celebrated across the nation with much ardour and pride. The Indian economy that was largely agrarian earlier can now boast of being the sixth-largest in the world, as per nominal GDP and the third largest by purchasing power parity. After about one and a half years of stress and strain, induced by extraneous pandemic factors, the Indian economy is showing signs of recovery. The Reserve Bank of India (RBI) in its recent report on the state of Indian economy observed that “the first impulses of the recovery have arrived, riding on thunder and lightning as the monsoon intensifies”. The Indian economy spurred by relaxed liquidity and financial conditions, which exhibits positive signals of recovery with turnaround in manufacturing activities. As Momentum for unlocking and vaccines increases, economy is gaining traction which is also reflected in spiralling stock prices, spur in number of Initial Public Offerings in the capital markets and highest ever foreign exchange reserves. The RBI report further notes “signs of revitalisation of the economy is the manner in which corporate India has faced the second wave of the pandemic relative to the first one. 1,427 listed non-financial companies have declared their earnings results so far and they account for 86.8 per cent of the market capitalisation of all listed nonfinancial companies in India. During the quarter that ended in June 2021, net sales of these companies surged by 57 per cent year-on-year versus a decline of 34 per cent in April June 2020 when the first wave raged”.
The report also notes that E-way bill collections rose to their highest level in the last four months. In fact, the gross Goods and Services Tax (GST) revenue collected in July 2021 has been 1,16,393 crore, 33% higher than in July 2020.
The pre-GST system involved paying multiple taxes that often percolated to the customers in the form of increased prices and with the introduction of GST four years back there is an ease of doing business by creating a streamlined single point of indirect tax rather than multiple taxes to be paid at different points of the production and sales. The implementation of GST has not been simple, and we take pride in the role played by the accounting profession in supporting this endeavour. In the modern governance, taxes are used as an instrument of economic policy leading to economic development, generate employment, bring price stability, regulate cyclical fluctuations, fulfil several non-revenue objectives and have inclusive growth. The growth of economy and its complexities are bringing new vistas in the accounting services and the profession has always raised its bar as partner in the Nation Building.
ICAI renews Mutual Reciprocity Agreement (MRA) with CPA Australia
It is really heartening that the ICAI has renewed the Mutual Recognition Agreement with CPA Australia on 29th July 2021 for a further period of 5 years. You may recall that the Union Cabinet, chaired by Hon’ble Prime Minister Shri Narendra Modi ji, had earlier approved the renewal of MRA between the ICAI and CPA Australia in April 2021.
The signing ceremony was attended by His Excellency Mr. Manpreet Vohra, Hon’ble High Commissioner of India to Australia as Guest of Honour, Ms. Merran H Kelsall, President and Chairman of the Board, CPA Australia, Mr. Andrew Hunter, Chief Executive Officer, CPA Australia along with ICAI leadership. With this renewal, both ICAI and CPA Australia shall continue to recognize the qualification, training of each other and admit the members in good standing by prescribing a bridging mechanism.
Engaging with SAFA Countries
I would like to inform you that the Institute received a request from the SAFA Accounting Standards Committee (ASC) to make a presentation on ICAI Valuation Standards 2018 at the SAFA ASC Meeting held on 30th July 2021. In pursuant to this request and with a view to have uniform Valuation Standards across SAFA countries and also to promote adoption of ICAI Valuation Standards 2018, a presentation was made at the SAFA ASC Meeting by our Valuation Standards Board. I am glad to inform you that the presentation was very well received, and it was decided that the SAFA board will consider the adoption of ICAI Valuation Standards 2018 in the next meeting in order to bring uniformity of valuation practices being followed across the SAFA countries.
Applicability of Accounting and Auditing Standards for LLPs
Limited liability partnerships (LLPs) are an alternative to corporate body form to traditional partnership firms. Under LLP, a partner’s liabilities are limited to their investment in the business. Limited Liability Partnership Amendment Bill 2021 has recently been passed by both the houses of parliament and with the assent from Hon’ble President of India come into force from 13th August, 2021. Several changes are made in amendment act that inter alia also include introduction of a provision relating to applicability of Accounting and Auditing Standards for LLPs. In order to align with the Companies (Accounting Standards) Rules, the said Act introduced a new section 34A to empower the Central government to prescribe “Accounting Standards” or “Auditing Standards” for a class or classes of limited liability partnerships. The new section provides that the Central Government may, in consultation with the National Financial Reporting Authority prescribe the standards of accounting and prescribe the standards of auditing, as recommended by the Institute of Chartered Accountants of India constituted under section 3 of the Chartered Accountants Act, 1949, for a class or classes of limited liability partnership.
Milestones Achieved by ICAI Social Media
In the present technologically empowered world, Social media platforms are a great opportunity to reach a large pool of stakeholders in order to communicate all important events, news and various other announcements. I am happy to inform you that ICAI social media platforms have recently achieved a major milestone of more than fourteen lakh followers across all seven platforms namely Twitter, LinkedIn, YouTube, Facebook, Instagram, Koo and Telegram. I request all the members to use these platforms to remain updated and got information about the various initiatives and activities of the Institute.
Participate in Sustainability Reporting Awards
The United Nations agenda for Sustainable Development Goals (SDGs) constitute a fitting framework which calls for attention towards the challenges leading to a sustainable future. With the integration of Sustainable Development Goals (SDGs) into organizational practices and reporting, entities across the globe would be able to deal with the world’s most pressing issues in a better way and encourage transparency and accountability. The Institute in its endeavour to benchmark global best practices vis-à-vis sustainability disclosures has this year instigated ICAI International Sustainability Reporting Awards. You may also encourage entities to participate in the Awards. The ICAI International Sustainability Reporting Awards would recognize and award entities for their outstanding contribution to Sustainable Development Goals which have led in initiatives undertaken towards Gender Equality and Climate Change and have implemented efficient and innovative sustainable practices.
Provide Holistic Learning Experience to Article Trainees
It is important for the members to provide an extensive training to the students covering multiple areas of the professional practice. The profession of Chartered Accountancy offers a broad gamut of the professional opportunities in various forms. A need was felt to expand the scope of industrial training to provide more avenues and encourage students to take industrial training. The wishes were fructified as amendments have been notified recently in the Chartered Accountants Regulations that enhance the scope of industrial training. Now a CA student can undertake industrial training for a period between nine months to eighteen months. Industrial training shall also be allowed in the offices of the Central or State Governments, Central statutory and judicial authorities, regulatory bodies, banking companies and such other departments of Central or State Governments, Institution or Organisation as may be decided by the Council from time to time to further widen the learning scope for students. Further, considering the fading economic geographical boundaries and interest of many students to explore overseas opportunities, the scope of industrial training has been expanded to include training for a certain period in any foreign country under a member of the accountancy body recognized by the International Federation of Accountants. While interested students should take full advantage of emerging opportunities, as member you are requested to inform and encourage them to take up these opportunities.
This month observed the conclusion of the most awaited sports event across the globe - Tokyo Olympics 2020; wherein India crowned its bestever performance with a seven-medal haul. The Olympics weren’t merely about athletics or winning, but about significant lessons which we all should aspire to imbibe. The whole country cheers not only for the medallists, but also for the sportspersons who did not manage to get on the podium but who brought limitless glory to the country, as everything isn’t about winning, but persevering for that victory. Neeraj Chopra, Mirabai Chanu, P V Sindhu, Lovlina Borgohain, Ravi Kumar Dahiya, Bajrang Punia, the men Hockey team and a spectrum of other Indian stars including women’s Hockey team, with their enduring spirit beat all odds and taught us that success is nothing but an uphill grind. After all, sports reflect the undeniable and irreplaceable significance of all that counts in life, that is self-discipline, hard work, determination, perseverance, and thorough commitment.
The Institute of Chartered Accountants of India too has always taken pride in this culture of deriving success not just from the final outcomes but also the process leading to it as it is rightly said by the famous author Gabrielle Bernstein - ‘It’s the journey that matters, not the destination’. Thereby, I urge the CA fraternity and budding students to pursue continual growth and progress, to triumph over their own mental inhibitions and to have the courage and commitment to fulfil all their goals. We must remember that success is superficial unless it is backed by self-actualisation and tenacity.
Stay safe, stay healthy. Best wishes.
CA. Nihar N. Jambusaria