ICAI - President's Message - June 2011

Foundation Day: July 1

We, through our institution of accountancy, too, run on the same fundamental principles of democracy in spirit, where our membership elects its representatives who commit themselves to the cause of the profession including its members, students and academia. Presence of ethos of ethics in our profession has always been its distinctive feature. 1st July is approaching and so we are ready with our preparations on celebrations of the CA Foundation Day. This year, as obvious from the cover of previous issues of the Journal, we have been remembering and celebrating thinkers and their words of wisdom and we will be celebrating our CA Day too as theFestival of Thoughts. This will be our humble tribute to guides and philosophers of our times, and this is the least we can do to honour them. It is my special request to all our members-in-industry to organise Foundation Day celebrations on 1st July in their respective organisation by inviting their colleagues and, possibly, the head of their orgainsations. I would like to appeal to all our members to celebrate the Day in a befitting manner.
 

Let us have a look at some of the significant developments in the Institute towards the growth our profession:

IFRS Regional Policy Forum in Bali

Recently, I had an opportunity to attend the IFRS Regional Policy Forum organised by the Indonesian Institute of Accountants along with the past-President CA. Amarjit Chopra and Smt. Usha Narayanan, Executive Director SEBI and Govt. Nominee on our Central Council. I addressed the Forum on the very first day on The Opportunities and Challenges of IFRS adoption/convergence and the imperative role of Accounting Standards Setters covering the Indian Standard Setter perspective on the convergence process of Indian Accounting Standards with the International Financial Reporting Standards. Other prominent speakers on the occasion were Sir David Tweedie, Chairman, IASB, Ms. Rosita Uli Sinaga, Chairperson, the Indonesian Accounting Standards Board, Mr. Ikuo Nishikawa, Chairman, Accounting Standards Board of Japan, Dr. Suk-Sig Lin, Chairman, Korea Accounting Standards Board.
 

On the second day, the Forum was first addressed by Smt. Narayanan on the topic Role of Market Regulators regarding the Opportunities and Challenges of IFRS adoption/convergence and later by CA. Chopra on The Opportunities and Challenges of IFRS adoption/ convergence – Issues of mobility of auditors and also preparation on Audit Standards to audit IFRS-based Companies.

Advancing Our International Ties

I happened to attend the meeting of Professional Accountancy Organisation Development Committee of IFAC held recently in Austria along with the past- President CA. Amarjit Chopra, wherein significant issues on development of accountancy profession in developing economies were discussed. I also attended the CAPA events held in Korea along with the ICAI Vice-President CA. Jaydeep N. Shah, where I have made presentation on an expression of interest for hosting the CAPA Conference in India in 2015. I am sure that we were able to convince the CAPA about the resources available within India for hosting the event. On the sidelines of the CAPA Board meeting, the matter relating to International Public Accounting Standards Conference and the involvement of the donor agencies for taking up projects was also discussed. CA. Jaydeep N. Shah also had detailed interaction with the officials of the Korean Institute of Certified Public Accountants to promote bilateral cooperation between the two Institutes.
 

Further, continuing to promote its efforts in extending technical support to developing Nations, we have submitted Expression of Interest for strengthening of the Liberia Institute of Certified Public Accountants (LICPA) through a twinning arrangement. The arrangement calls for technical support to promote and maintain world class professional standards among LICPA members and assist the Institute to develop professional accounting qualification programme to university graduates in Liberia.
 

Our Central Council colleagues CA. Vinod Jain and CA. Naveen N. D. Gupta attended the International Education Standards meeting in Toronto recently, wherein significant issues on the development of new education standards were discussed. Yet another Central Council colleague CA. Manoj Fadnis had discussions with the Asian-Oceanian Standards Setters Group office bearers in Indonesia recently to discuss the progress of convergence within Asia Oceanic region.

Global Commerce Education Summit in July

I wish to inform here that we will be organising a one-day Global Commerce Education Summit in July 2011 in New Delhi with the Vice-Chancellors/Head of Commerce and/or Management department of various universities and eminent national and international academicians as participants, providing a platform to them to debate new paradigms for commerce and accountancy education in India. The Summit will also focus on the emergence of single regulator to ensure quality across the Institution mechanism. Hon’ble Minister of Human Resource Development Shri Kapil Sibal has given his consent to inaugurate the Summit. The summit intends to solicit inputs from renowned Commerce academicians aiming at a universal understanding on the imperatives of the theme of the conclave.

Accounting Standards Advisory Group

It has been decided to constitute an Accounting Standards Advisory Group at the national level and various Accounting Standards Advisory Groups in different regions to advise the Accounting Standards Board of the ICAI on various issues related to formulation and revision of Accounting Standards. The National Accounting Standards Advisory Group and Regional Accounting Standards Advisory Groups would ensure involvement of greater number of our members and other stakeholders in providing inputs to the Accounting Standards Board at various stages of the formulation of Accounting Standards. This step would enhance greater credibility of the standardssetting process in the country by providing timely feedback to the Board.

Taxation of Services Rendered by Chartered Accountants

I wish to inform that I along with the ICAI Vice-President CA. Jaydeep N. Shah and my Central Council colleague CA. Bhavna Doshi met Central Board of Excise and Customs Chairman Shri Sunil Dutt Majumder recently at the Ministry of Finance in New Delhi with an objective to apprise him of the disparity in respect of taxation of services rendered by chartered accountants visà- vis legal professionals. I also brought to his notice that though services rendered by individual lawyers to individuals are out of tax net, that exclusion is not available to our members, which is a distortion for the two, otherwise similarly-placed, professionals. I also pointed out that exemption available to our members in respect of representation services was withdrawn in view of bringing in such services provided by legal professionals in the service tax net. The taxation of such services in case of legal professionals has been stayed by the Delhi High Court and there is also stay on withdrawal of the exemption by the Delhi High Court. Let us understand that similar petitions would be filed by legal professionals across the country and if the matter is decided in favour of them, it would place our members at a disadvantage. It was suggested that a similar exemption to our membership be restored till the issue is finally decided. A representation on the same agenda was handed over to Shri Majumder during the meeting. 

Initiatives for Social Responsibility

Investor Awareness Programme: I wish to inform all stakeholders of the profession that the Ministry of Corporate Affairs (MCA), under the aegis of Investor Education and Protection Fund (IEPF) of the Government of India, has entrusted us with the task to educate the present and prospective investors of our nation about the intricacies of capital market. The objective of the initiative is to create better awareness among common people for investment in corporate sector towards creating a strong India Inc. Apart from the related programmes to be conducted by our Regional Councils and Branches, the MCA desires us to conduct programmes through selective resource persons in the smaller towns under the overall control of our Branches, associating with CII, FICCI, ASSOCHAM, etc., wherever applicable and possible. As conscious keeper of the financial system of the country, it’s imperative for our member fraternity to be a part of this noble initiative of the MCA as a resource person. It would, in fact, from part of our Social Responsibility towards this country. I am sure we will naturally give it our best effort to reach a wider spectrum of the society through such programmes and create a thorough financial awareness.
 

Training Programmes for Government Officials: I am happy to acknowledge that we recently organised a two-day training programme on Cash to Accrual Basis of Accounting for the officials of Finance and Accounts Department of Lakshadweep. We also organised an orientation programme for graduates of the island on the prospects of the CA course on the sidelines of this training programme. Dr. N. Vasantha Kumar, Secretarycum- Commissioner of the Department of Finance & Accounts, inaugurated the training programme and appreciated our efforts for imparting training on the pivotal issue of cash to accrual basis of accounting. Our Central Council colleague CA. Anuj Goyal was also present during the programme.
 

It is again satisfying to acknowledge that another two-day training programme on various topics of relevance in finance and accounting was recently organised for the Finance Department of Tamil Nadu in Chennai. Joint Secretary Thiru R. Kirlosh Kumar inaugurated the programme and appreciated our noble efforts for giving this fruitful training. Deputy Secretary Dr. Vijay Pingale was also present during the inauguration. Our Central Council colleagues CA. P. Rajendra Kumar, CA. V. Murali, CA. M. Devaraja Reddy were also present along with the SIRC Chairman CA. K. Shanmukha Sundaram.
 

Workshop of the Quality Review Board jointly with ICAI: I am pleased to inform you that a workshop of the Quality Review Board was recently organised in New Delhi jointly by us for the Auditors of the listed companies. Shri R. Bandyopadhyay, Chairman, Quality Review Board, CA. Amarjit Chopra, immediate Past President, ICAI, CA. Yogesh Sharma, New Delhi, and the undersigned, addressed the participants in the workshop. Shri Bandyopadhyay shared his views on the activities of the Quality Review Board. There were two technical sessions addressed by CA. Chopra on “Quality Review - Role and Responsibility of Audit Firms” and by CA. Sharma on “Audit Quality Review – International Perspective”.

ICAI Representation on Government Committees

It is quite satisfying to me to inform our accounting fraternity that we have recently got representation in two very important committees formed by the Ministry of Corporate Affairs. The committees were formed in the areas which are very important not only for the entire corporate world but also for the Indian economy and for our profession. Our Council colleagues CA. Vinod Jain and CA. Naveen N.D. Gupta were nominated on ‘Committee to advise the Government on the proposed Takeover Code’ and ‘Committee to advise the Government on the Bimal Jalan Committee Report on Ownership and Governance of Market Infrastructure Institutions (MIIs)’ respectively. In a meeting of the Committee on Takeover Code held recently, CA. Vinod Jain presented the views of the Institute on the Size of Open Offer, Trigger Point, Creeping Acquisition and Offer Price besides other important aspects of the Code. Meeting of the other Committee related to Ownership and Governance of the MIIs was also attended by a representative of the Institute.

Meeting with Minister of State for Corporate Affairs
ICAI President CA. G. Ramaswamy with the Minister of State for Corporate Affairs Shri R. P. N. Singh during a meeting in New Delhi

Celebrating Accounting Foundations

Diamond Jubilee Celebrations of SIRC: Just couple of years back it was very special moment for all of us when we celebrated Diamond Jubilee year of the Institute with great enthusiasm. We have similar occasions to celebrate this year as well in which all of our Regional Councils are entering their Diamond Jubilee year. More reasons of happiness will come as many Branches are also entering/completing their Golden or Silver Jubilee. It’s really time for celebrations, and personally it’s very satisfying to be part of these moments of joy and happiness as President of this esteemed Institute.
 

It was quite heartening for me to participate in the inaugural function of the Diamond Jubilee Celebrations of the Southern India Regional Council in Chennai along with the ICAI Vice-President CA. Jaydeep N. Shah. CA Final Examinations Gold Medallist CA. S. Viji, Chairman, Sundaram Finance Limited and Managing Director, Brakes India Limited, was the Chief Guest, and Shri Nalli Kuppuswami Chetti, Managing Partner, M/s. Nalli Chinnasamy Chetty also graced the occasion. The occasion grew all the more important with the presence of past-Presidents and past members of the Central Council of the Institute, past-Chairmen of SIRC, past members of the Regional Council of SIRC, present members of our Central Council and the Regional Council of SIRC. It was heartening to note that senior most members had come to receive the honours with enthusiasm, which is a sign of our neverending involvement and dedication for profession. I would like to fondly recall here that the SIRC had celebrated its Golden Jubilee in 1999 during my term as SIRC Chairman. It was a proud privilege for me to be one of the recipients of the award being the past- Chairman of SIRC. I also had the honour of unveiling the Diamond Jubilee logo of SIRC and releasing a four-page supplement booklet on the occasion.
 

Fifth Anniversary of Kuwait Chapter of ICAI: I am happy to share with you that our Kuwait Chapter celebrated its fifth anniversary and I was more than happy to attend the function with ICAI Vice-President CA. Jaydeep N. Shah. The patron of the Chapter and Ambassador of India His Excellency Shri Ajai Malhotra was present on the occasion. Chairman of the Chapter CA. M. S. Mathew, founder Chairman CA. Jagdeesh Joshi and other members along with their family participated in the celebrations. The ambassador expressed his pleasure on the Chapter getting the due recognition with the presence of ICAI leadership, and said that many large businesses in Kuwait relied on and respected the professional standards of our members of the Chapter. I acknowledged his compliments with gratitude and said that our members had earned this reputation through their professional integrity following the high ethical standards, and informed the gathering of our professional agreement with other international professional accounting bodies.

Initiatives for Members

ICAI Connect - Membership Revival Campaign: It is quite satisfying to acknowledge that a membership revival campaign, ICAI Connect, has been launched among the chartered accountants in industry. It has been observed that many members working in industry do not renew their membership, which prevents them from getting latest updates on development in the profession. We will make a special effort to reach out to those members through ICAI-Connect programmes to be held at various corporations. I would request the membership to help us in this noble and benevolent initiative, ICAI Connect, and make this revival campaign a grand success.
 

Capacity Building Measures: Tax Suite/ROC software: I am pleased to inform you that the Executive Committee of the Institute has decided to procure the tax compliance software called Tax Suite which combines facility for income tax, TDS, audit reports, project report/CMA, Form Manager, Annual Information Return, Service Tax and document management, to empower our members for their general and specific practices. The Committee has also decided to procure the ROC software pertaining to manage all secretarial requirements and generating all forms as per the MCA-21 requirements, which will provide our members a facility to prepare auto filling of e-forms, shares records/certificates, meetings and minutes, resolutions/drafting, annual return forms, and maintain their registers and reports. The content of these software will be made available shortly on the ICAI website, so that the software setup may be downloaded and installed conveniently, free of cost.
 

Chain of Workshops on XBRL: In my last communication, I had informed that the Ministry of Corporate Affairs had mandated certain class of companies to file their financial statements in XBRL format for the year ended 31st March, 2011. In order to educate our members on XBRL and providing handson training on the process, XBRL India has planned a chain of workshops to be organised at various locations across the country. During the first phase, workshops will be organised to provide training on XBRL filings in selective big cities using the resources of the Information Technology Training Centres of the Institute. Three leading companies having expertise in XBRL filings will be the knowledge partners for this initiative. I sincerely hope that this training will help our members to understand XBRL, which is emerging as the most popular reporting language across the world. In view of the importance and need, we have also focused on XBRL in this issue of the Journal and five articles on the subject have been published. More articles and case studies will also be published on regular basis in the coming months to educate the members.
 

Group on LLP Conversion Formed: In my last communication, I had also informed that the Council had decided to allow all CA firms to convert themselves into LLPs which would enable CA firms to grow bigger and increase their capacity. Pursuant to this decision of the Council, rules for conversion and format for preferring an application for conversion into LLP are required to be formulated. Accordingly, a group has been constituted for this purpose with my Central Council colleague CA. S. Santhanakrishnan as its Convenor and Central Council colleagues CA. Abhijit Bandhyopadhyay, CA. Manoj Fadnis, CA. Jayant P. Gokhale, CA. Charanjot Singh Nanda and CA. Dhinal Ashvinbhai Shah as its other members, for making suitable recommendations for the consideration of the Council.
 

ICAI-BU Coordination Committee Meeting: Recently, a meeting of the ICAI-BU Coordination Committee was held in New Delhi, represented by the Vice-Chancellor Dr. C. Swaminathan and other senior officials from the Bharathiar University (BU) and myself, ICAI Vice-President CA. Jaydeep N. Shah, ICAI Secretary Shri T. Karthikeyan, Director Board of Studies Shri Vijay Kapur from the ICAI. I am happy to share with you that the Coordination Committee has decided to increase the number of admissions to the various courses under the joint programme. The Committee also decided to hold a joint seminar in the month of June/July 2011 and to hold the Examination from 2nd June, 2011, to 7th June, 2011, in six centres, viz. Delhi, Kolkata, Coimbatore, Mumbai, Chennai and Ernakulam. I sincerely hope that the students would do well in the coming examinations.

Special Campus Placements Programmes

Special campus placement programme was organised to appoint Education/Executive Officers in the Institute. Hundred candidates have been shortlisted for the final round of interviews out of more than 1000 registrations for this placement. The recruitments of our young members would be for our technical and non-technical Committees with a view to provide better services to the growing membership. Campus placement for small- and medium-sized enterprises and CA firms was also organised at eight centres in Ahmedabad, Bangalore, Chennai, Kolkata, Mumbai, Nagpur, New Delhi and Pune quite successfully. I am sure such special placements will eventually empower our small and medium firms in building their capacities.

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Summer has finally arrived at our doors equipped with abnormally soaring temperatures. Despite a timely start, there have been a lot of irregularities in our climate in the recent past and this appears to be alarming. Somewhere our irresponsible and noncommittal attitude towards our existence as well as our atmosphere, towards our heritage as well as our future, and towards our sense of righteousness as well as the forbidden is responsible for all such critical existences. If we continue with such attitude, we may invite larger environmental crises in our lifetime.
 

I know one thing: our training as chartered accountant has taught us to be ethical and responsible. Now let this training transcend its spirit on to our way of living. And I am sure, we will be able to build a better and secure time for our generation next.