Interview with ICAI President CA UTTAM PRAKASH AGARWAL
ICAI President CA UTTAM PRAKASH AGARWAL in an Exclusive Talk with CA SUDHIR
HALAKHANDI for CAclubindia.com
CA Uttam Prakash Agarwal born in Sumerpur District
Pali in Rajasthan, having initial education in Abu road, Rajasthan is the
President of ICAI and now turning into the youthful and energetic brand
image of ICAI.
Practising as a Chartered Accountant for 21 years with proven adroitness
in taxation, assurance, arbitration and advisory services.
President of the Institute of Chartered Accountants of India (ICAI) for
the year 2009-10 , Vice President of the Institute of Chartered Accountants
of India (ICAI) for the year 2008-09 , Elected to the Central Council of
ICAI for two consecutive terms (2004-07 & 2007-10), Member of the Committee
on Quality Control of SAFA, an apex body of SAARC , Technical Advisor on
the Small & Medium Practices Committee of IFAC Member of the executive committee
of premier Chamber of Commerce the Indian Merchants Chamber (IMC) , Chairman
of the Western India Regional Council (WIRC) for 2000-01 , Treasurer of
WIRC for 1997-98 , Chairman of the Committee for Members in Industry for
2007-08 , Chairman of Research Committee of ICAI for 2007-08 , Chairman
of Western Indian Chartered Accountants Students Association for 1996-97
so on and so forth………
CA Sudhir Halakhandi having more than 500 Tax Articles
to his credit in almost all the top tax journals of the country covering
Both direct and indirect Taxes – Income Tax, VAT and Service Tax. The rarest
of the rare talent having command on both direct and indirect taxes.
We have made him Caclubindia featured personality in JAN 2009. He is on
board with us since Nov'08 but in a short span of few months he has made
a remarkable contribution to the community. The students love him for his
encouragement, professionals respect him for his opinion and we adore him
for being with us...
SUBJECT OF TALK
Bank Audits
Satyam Fiasco
Student Matters
Goods and Service Tax
International image of ICAI
All the professional matters have been discussed in the talk of
these two experts.
CA Sudhir Halakhandi
Welcome Mr. President Sir on the CACLUBINDIA site. It is first
time that we are having a talk on CA club India with the president
of one of the biggest accounting regulatory body of the world. I
know sir; your time is so precious so I will take very small time
from you sir. Can we start Mr. Agarwal?
CA Uttam Prakash Agarwal, ICAI President
Yes Mr. Sudhir! It is always nice to talk to you. Please start.
CA Sudhir Halakhandi
Mr. Agarwal! The starting of your tenure was very crucial and
you have to handle the situation after Satyam fiasco! The club members
have also discussed the matter on forum for very long time. Now
please tell me how you are dealing with the problem because the
future of the profession is very much affected the manner in which
the post Satyam situation is being handled by ICAI.
CA Uttam Prakash Agarwal, ICAI President
The incident no doubt came as a shocker at the beginning of the
year itself. There is also no doubt that the profession is as much
affected by the fiasco, as the IT industry and the entire nation,
because accusations are made on the credibility of audit profession.
Even after three months of the incident coming to light, certain
crucial things are still not clear. It is not clear as to whether
this is a case of falsification of accounts, or the issue is larger
i.e. siphoning off of funds. It is also not clear as to whether
management alone is responsible for the scam, or whether there have
been other players. The role played by the auditors is also not
clear. There are several agencies, including ICAI, which are investigating
the matter, but are still not clear as to whether the auditors have
actively colluded with the promoters, or they have been negligent
in the discharge of their duties.
In the above light, we have decided to deal with the problem with
the following two-pronged strategy:
On the one hand, the Institute, through its High Powered
Committee and the Disciplinary Directorate, is trying to go
to the depth of the problem and find out the degree of misconduct,
if any, of the part of the auditors. We are endeavouring to
complete the investigation speedily and at the same time, thoroughly,
without leaving any gaps in-between. A speedy and efficient
disposal of the matter will surely reinforce the faith of the
public on the role played by the auditing regulator.
Simultaneously, the auditing standards issued by the Council,
would need a re-look as to whether the standards are stringent
enough or whether any strengthening is required to be done.
But, this exercise can get focussed once the investigation of
the role of auditors is complete.
The Institute, through its High Powered Committee and the Disciplinary
Directorate, is precisely working in terms of aforesaid two strategies.
CA Sudhir Halakhandi
Mr. President sir! How do you visualize the present scenario
of Bank audit allotment by individual banks? ICAI has reservations
about it. Please explain ICAI viewpoint in this respect sir.
CA Uttam Prakash Agarwal, ICAI President
The present scenario of bank audit allotment paints a very gloomy
picture for the entire economy. ICAI is totally against the present
scenario of bank audit allotment followed by RBI pursuant to the
managerial autonomy granted to bank management by Government of
India.
The managerial autonomy granted to bank has resulted into built
in personal bias in selection of individual auditors by the banks
in an adhoc manner and thus, violating the RBI guidelines. The said
process has left a complete dent on the independence of the auditors.
To put the records straight ICAI has been a strong supporter of
the time tested policy followed by the RBI in the past because the
policy followed by RBI in selection and appointment of auditors
since last two decades has proved beyond doubt that the financial
services sector in India has been working efficiently when elsewhere
in the world the reputed financial institutions had fallen like
pack of cards. We are of the strong opinion that the introduction
of managerial autonomy granted to individual banks leading to selection
of auditors by the management has no parallel in the world.
To be very specific, we may state during the selection of the bank
branch statutory auditors for 2008-09, first of all RBI forwarded
the names of auditors to various banks having correspondence to
the number of vacancies in a particular bank and many bank management
selecting the branch auditors on their whims and fancies either
by making telephone calls or simply through mass email. In fact,
we can describe the selection of auditors in current scenario is
merely done in chaotic manner and does not has any iota of any principle
in carry out this process.
In the wake of Satyam fiasco, the current process of selection of
branch statutory auditors acquires a more significant dimension.
We have impressed upon all authorities in the country right from
Ministry of Finance to revert to the old time tested system and
withdraw the managerial autonomy granted to PSBs. In fact, we have
been making continuous representation to the highest authorities
in the country that the financial service sector is the backbone
of the Indian economy and it is imperative that the auditors of
private sector banks should also be appointed by RBI. However, I
shall not hesitate to say that all our requests and representation
had fallen on deaf ears. In my opinion, the regulators need to reconsider
our suggestions to avoid any major failures in future.
CA Sudhir Halakhandi
Mr. President! The trade and Industry is waiting for the GST
which has been promised by the Mr. P. Chidambaram (The then FM)
to be implemented in 2010. How do you see the role of ICAI in the
initial stage of Introduction of GST and it’s smooth journey?
CA Uttam Prakash Agarwal, ICAI President
Since the Govt of India intends to introduce GST from 2010 and
the Group constituted by the Empowered Committee of State Finance
Ministers to study this aspect and suggest a model of GST for the
country have submitted their report and also dealt with other issues
that need to be addressed. ICAI had also issued a concept paper
on GST and also doing research work to Prepare Model GST Act, to
make the members aware organizing seminar on GST.
CA Sudhir Halakhandi
Mr. Agarwal! The CA course has undergone so many changes in recent
times. Sir, the majority of students feel it is irritating and cumbersome.
Sir, large numbers of students are the member of the Caclubindia.com
and I know changes are the part of life and especially in professional
courses changes are inevitable. Please sir explain the need of so
many changes in the CA course to the students. Please explain your
point of view to the students.
CA Uttam Prakash Agarwal, ICAI President
The Chartered Accountancy course is a very important qualification
in the field of finance and accounting. Accounting and Finance
are essential service functions to business organizations. The
business organizations are an integral part of the economy and
the economy is undergoing constant changes and therefore the
business organizations have also to adapt themselves with the
changing economic needs.
Auditing and financial reporting are the important functions
of the Chartered Accountants. In this dynamic world the capital
market requirement are undergoing fast changes. Therefore, the
financial statements have also to be drawn in accordance with
various changing requirements of the Law as well as the regulators.
Taxation is always subject to lot of changes. Now days due
to very fast economic development taxation laws have also to
be amended frequently to keep pace with the changes. A student
has to constantly update himself if he is to be considered as
fit for business organizations.
Information Technology has become an integral part of business
operations. Unless a Chartered Accountant is proficient in Information
Technology he cannot serve as finance and accounting specialist.
The globalization has brought the economies of various countries
together and there is tremendous increase in the inflow of cross
border finance. There are various implications due to the increase
in cross border transactions with which a chartered accountant
has to keep
The requirements of educational standards of international
professional accounting institutions have to be complied with
by the ICAI. Therefore, it is very essential that the course
curriculum has to undergo changes now and then.
The ICAI has also to satisfy the requirements of the middle
sector of the business segment. For example, a small and medium
industry or organization cannot afford to employ a chartered
accountant at a very high salary. They are in need of middle
level executives. For this purpose the accounting technician
course was introduced as part of the Integrated Professional
Competence Course.
The CA course curriculum was thoroughly changed in the year
September, 2006. The Integrated Professional Competence course
(IPCC) has been formulated with minimum changes from the earlier
professional competence course (PCC). There is absolutely no
change in the syllabus.
Before effecting any changes in the syllabus a review committee
consisting of eminent professionals thoroughly analysis the
Indian and the International syllabus and suggests changes to
bring the Indian CA curriculum on par with the International
syllabus.
CA Sudhir Halakhandi
Mr. Agarwal! Recently ICAI has put some restrictions on the transfer
of articleship and at CAclub forum we have received some of the
reservations from the students also about these restrictions. Please
sir! Something from your side about the need of such changes and
restrictions.
CA Uttam Prakash Agarwal, ICAI President
Since the articleship is the backbone of our Chartered Accountancy
Course and academic studies and training under a practicing Chartered
Accountant run concurrently in our course, some sort of slackening
on this account was observed and it was considered necessary to
impose certain reasonable restrictions on the termination of articles.
Wherever there are genuine medical reasons or transfer of a working
parent of the student, the transfer of articles will be allowed
and for justifiable reasons, a Group has been constituted to suggest
what would be the other reasons where the transfer of articles needs
to be allowed.
CA Sudhir Halakhandi
President sir, there is a suggestion that the CA students should
get a college/university type education to be arranged and managed
by ICAI in first two years of their entry in the CA course like
other professional courses before going for the Practical training.
I know sir, it will be a very big project considering the number
of aspiring students. Do you see any possiblity of this type of
CA education in near future sir say in 4 or 5 years?
CA Uttam Prakash Agarwal, ICAI President
The Chartered Accountancy course is governed by stringent regulations
and it is fundamental that a CA student should compulsorily undergo
three years of articled training and pass the necessary examination
and satisfy other educational requirements. It is not possible in
the present circumstances to conduct the CA course like a college/
university type education. The ICAI has to comply with International
professional accounting guidelines to keep the Indian CA on par
with the International Accounting qualifications.
CA Sudhir Halakhandi
Mr. president sir! You are turning into the brand image of the
ICAI and your energetic and youthful image has made a large fan
following from the profession for you. I know sir the schedules
these days are so hectic for you and most of the members want to
know about your feeling while leading the one of the biggest accounting
body of the world at this juncture and how do you manage these hectic
schedules these days.
CA Uttam Prakash Agarwal, ICAI President
Thank you for your kind words. I feel privileged to assume the
highest office as the 57th President of one of the largest bodies
of accountants in the world. I thank the Council Members for bestowing
this honor on me and for reposing their trust in me. This great
responsibility now rests on my shoulders and I accept it with great
humility and with full preparedness to continue to lead the profession
to greater heights of glory and success. I have had the additional
honor of assuming the office of President during the Diamond Jubilee
Year of the Institute. It is my earnest desire to organize many
activities, thereby making 2009 as one of the most eventful years
of the Institute.
CA Sudhir Halakhandi
Mr. Agarwal! Recently you are at Johannesburg to attend the standard
setters meeting. Please sir! Tell us about some of the experiences
there and how the opinion of ICAI rated at international level?
CA Uttam Prakash Agarwal, ICAI President
The NSS is a grouping of national accounting standard-setters
from around the world, plus other organizations that have a close
involvement in financial reporting issues. The group is chaired
currently by Ian Mackintosh, Chairman of the UK Accounting Standards
Board (ASB). The meeting was attended by representatives of standard
setters from Australia, Canada, France, Germany, Hong Kong, India,
Italy, Japan, Malaysia, New Zealand, Republic of Korea, South Africa,
Sweden, Taiwan, the United Kingdom, and the United States. Representatives
of the European Financial Reporting Advisory Group (EFRAG), the
International Accounting Standards Board (IASB) and the International
Public Sector Accounting Standards Board (IPSASB) also attended.
There were also 16 registered observers from the Eastern, Central
and Southern African Federation of Accountants (ECSAFA) and 43 registered
observers from South African organizations.
The meeting was held in Johannesburg on 8-9 April 2009 and considered
the developments on the active phases of the joint IASB-US Financial
Accounting Standards Board (FASB) Conceptual Framework project.
At the meeting, the UK ASB updated NSS members on the developments
related to the Global Financial Crisis: Accounting Developments
and Implications for financial reporting.
At the meeting, there were active participation from member bodies
on means of enhancing transparency, accountability and strengthening
the standard setting process.
CA Sudhir Halakhandi
Mr. Agarwal! Thanks for giving time to Caclubindia and it is
nice to talk to you. Now something personal sir! About your native
place, your family, your hobbies and last but not the least your
aim in the life?
CA Uttam Prakash Agarwal, ICAI President
I was born in Pali district of Rajasthan and completed my graduation
from Rajasthan University. In my family I have my wife Mrs. Aruna
Uttam Agarwal and my daughter Ms. Madhuli Uttam Agarwal. My hobbies
are reading books, relentless pursuit for welfare of everybody,
traveling and exploring the globe, watching cricket match in my
free time, etc. My aim in life is to provide my services to the
Institute and the profession till my last breath with my single-minded
devotion.
CA Sudhir Halakhandi
Thanks Mr. Agarwal and Good wishes from Caclubindia.
CA Uttam Prakash Agarwal, ICAI President
Thanks and good wishes to you Mr. Sudhir and all the members
of the Caclubindia.
CAclubindia
