Important Clarifications
LLP will not be treated as Body Corporate for Limited Purpose of Appointment as Statutory Auditors:
Limited Liability Partnership (LLP) has now become a new form of statutory organisation which is gaining its importance and opening up new opportunities for the practising Chartered Accountants. The practising Chartered Accountants can now take the advantage in forming/realigning their firms as Limited Liability Partnership. As per Section 3 (1) of the Limited Liability Partnership Act, 2008, since a limited liability partnership is a body corporate, it is precluded from appointment as Statutory Auditors of the company under Section 226 (3) (a) of the Companies Act, 1956 which provides by way of disqualification for appointment of auditor of a company that a body corporate cannot be appointed as an Auditor. To remove this lacuna, on a representation made by us, the Ministry of Corporate Affairs has clarified vide its Circular No 30/2011 dated 26-05-2011 that Limited Liability Partnership of Chartered Accountants will not be treated as body corporate and has taken LLP out of the purview of the definition of Body Corporate under Section 2 (7) (c) of the Companies Act, 1956 and therefore, LLP can be appointed as Statutory Auditors of the company.
Clarification on Member-in-Charge of Office of CA/ Firm of CA:
This is to inform our membership that we had recently discussed the question whether ‘member’ in-charge of an office of a Chartered Accountant or a firm of such chartered accountant in terms of provision of Section 27(1) was necessarily required to be associated with a chartered accountant/firm concerned as a partner or paid assistant, or, whether a member associated with the chartered accountant/ firm as a retainer could also be designated as member in-charge. Noting the related directions contained in the Code of Ethics, it was concluded that an office of a chartered accountant/firm could be placed under a charge of a member associated with him/firm as a partner or paid assistant, and that if such a member is paid assistant, he is required to be in full time employment.
Initiatives for Members
Getting Close to Members in Industry-Outreach Programme:
As I have informed earlier, the Outreach programme has been conceived with the idea of bringing the members in Industry closer to ICAI by highlighting our activities for them, to interact on matters of professional interest, to encourage new members to apply for membership, to solicit views from members in industry about what they expect from the ICAI, and to encourage their participation in research projects of the ICAI. It is a pleasure to inform that second such CMII Outreach Programme was organised at the Power Finance Corporation of India Ltd. in New Delhi. I, along with the Vice-President CA. Jaydeep N. Shah and my Central Council colleagues CA. K. Raghu, CA. Pankaj Tyagee, CA. S. B. Zaware and CA. Rajkumar S. Adukia among others, had the opportunity of interacting with our members on various issues concerning the profession. We also interacted with the Director (Finance) of the Corporation, Shri R. Nagarajan, about our various initiatives in this regard. More than 40 CAs attended the programme.
Differentiating Ind ASs from IFRSs and Existing ASs:
We have considered and finalised the differences between Ind ASs and IFRSs, and Ind ASs and the existing ASs, which may be issued in form of our pronouncement, as it would remove the ambiguity amongst various stakeholders and public regarding the carve outs and differences in Ind ASs from corresponding IASs/IFRSs.
Compendium of Technical Guides on Internal Audit:
Internal auditors today must possess an always*xpanding toolkit of technical skills and competence to perform a job that seems to constantly change in scope and function. Our Institute is committed to facilitate the auditors in acquiring the required skills and competence, and, therefore, we have issued Compendium of Technical Guides on Internal Audit having Industry Specific Technical Guides as well as Generic Guides, so that our members can access all these Guides at one place. Volume I of the Compendium all Technical Guides and Volume II all background materials and various studies relating to internal audit issued till date.
CABF-Meeting Demands of Crises:
I would like to inform you with a lot of satisfaction that a large number of members and families of deceased members have been benefited through the CABF (Chartered Accountants Benevolent Fund). A sum of Rs. 2,16,16,500 has been released during the period, from 1st April, 2010, to 31st March, 2011. Keeping in mind of the nature of help this Fund is capable of extending, I have made an appeal to the Chairman of Regional Councils and Branches to collect donations for the Fund and to contribute to it at their end. I would like to appeal to all members of the Institute to contribute generously for the Fund.
New Groups Constituted:
To Address the Issue of Money Laundering: A Group comprising the ICAI Vice-President CA. Jaydeep N. Shah and our Central Council colleagues CA. Jayant Gokhale, CA. Mahesh P. Sarda, CA. S. B. Zaware, CA. Dhinal Ashvinbhai Shah, CA. S. Santhanakrishnan, CA. Sumantra Guha and CA. Sanjay Kumar Agarwal has been constituted under my convenorship to provide necessary inputs/ suggestions on effectively addressing the menace of money laundering, and related issues in view of public interest attached. After due consideration, the inputs given by the Group will be submitted to the Government.
To consider setting up a cyber cell: A group comprising my Central Council colleagues CA.Nilesh S. Vikamsey, CA. P. Rajendra Kumar, CA. Ravindra Holani and CA. Sanjay Kumar Agarwal has been constituted under the convenorship of CA. S.B. Zaware to consider setting up of a Cyber Cell in our Institute, including the study of issues involved and the steps required to be taken in that regard.
XBRL Workshops:
As communicated in my earlier messages, we, through our CPEC and CMII, have started organising one and a half day workshops on XBRL, providing hands-on trainings for creation of XBRL documents for filing with the Ministry of Corporate Affairs. These workshops are in addition to the awareness seminars and conferences being organised at various locations. The batches for providing hands-on trainings on XBRL are going on at Mumbai and Hyderabad. Indore, Pune, Hyderabad and Coimbatore have already had one round of training workshop each.
The Ministry of Corporate Affairs (MCA) has also had a meeting with various consultancy firms and the software vendors. It proposes to host the list of software vendors on XBRL on their website shortly for the convenience of all. As per the FAQs issued by MCA, professionals are also required to certify the XBRL documents filed with MCA. The Institute is also considering to provide separate guidance to the members in this regard.
Bhoomi Pujan at Gwalior Branch: This is a matter of satisfaction for me to report to my accounting fraternity that Bhoomi Pujan for branch building of the Gwalior Branch of CIRC of ICAI was organised by the Branch recently, which I attended as the Chief Guest along with the ICAI Vice-President CA. Jaydeep N. Shah. The function was also attended by my Central Council colleague CA. Ravindra Holani and CIRC Chairman CA. Vivek Khanna among others. This function was well attended by the members, students and other dignitaries.
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