The Institute of Chartered Accountants of India

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The Institute of Chartered Accountants of India

• Established by an Act of Indian Parliament
• The Chartered Accountants Act, 1949

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Our Mission
The Indian Accountancy Profession will be the
Valued Trustee of World Class Financial
competencies,Good Governance and Competitiveness
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Profile of ICAI

• Was set up in 1949 under the Chartered
  Accountants Act, 1949 even before adoption of
  Constitution of India in 1950

Since then Profession has grown leaps and bounds
in terms of Membership and Student base
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Profession in India

• 145K Members spread throughout the country and in
  different parts of the world
• Sizeable studentship base
• Increase in percentage of members joining
  industry
• Chartered Accountants are rendering services in
  every walk of economic life - Politics,
  Judiciary, Government, Agriculture, Corporate,
  NGOs
• Profession is dominated by small firms
• Increasing trends towards consolidation
• Government of India looks at ICAI as Partner in
  Nation Building
• Technical Standards based on International
  Standards
• Focus on Capacity Building in the emerging
  context

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Size of Firms

• Vast majority SMPs with SME clients
• Cost and time vis-a-vis detailed requirements of
  Standards
• We do not believe in separate auditing Standards
  for audit of SMEs
• alternative between audit and review likely
  to create confusion, not much value addition seen
  w.r.t clients as well as costs and risks involved
  vis-a-vis remuneration

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ICAI Profile
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Role of ICAI

• To regulate the profession of Accountancy
• Education Examination of Chartered Accountancy
• Exercise Disciplinary Jurisdiction
• Input on Policy matters to Government
• Ensuring Standards of performance of Members
• Formulation of Accounting Standards
• Prescription of Auditing and Assurance Standards
• Laying down Ethical Standards
• Continuing Professional Education
• Financial Report Review
• Monitoring Quality through Peer Review
• Conducting Post Qualification Courses

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ICAI Network

• Chapters Abroad
• Abu Dhabi
• Bahrain
• Botswana
• Doha
• Dubai
• Indonesia
• Jeddah
• Kuwait
• London
• Melbourne
• Nairobi (Kenya)
• Nigeria
• Port Moresby (Papua New Guinea)
• Riyadh
• Saudi Arabia (Eastern province)
• Sydney
• Toronto
• Zambia

Decentralized Offices
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The Central Council

• Consisting of 40 Members
• 32 Elected Members
• 8 Nominated by Central Government
• Term Three years
• Headed by President
• Elected by the Council for one year term
• Empowered to frame Regulations under the Act and
  to constitute necessary standing and non-standing
  Committees

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Standing Committees
Executive Committee
Finance Committee
Examination Committee
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Key Non-Standing Committees
Accounting Standards Board
Auditing Assurance Standards Board
Committee on Insurance Pension
Committee on Accounting Standards for Local
Bodies
Committee on Economic and Commercial Laws
Expert Advisory Committee
Research Committee
Board of Studies
Corporate Allied Laws Committee
Editorial Board
Committee on Ethical Standards
Comm. On Fin. Markets Investors Protection
Information Technology Committee
Committee on Trade Laws WTO
Committee on Corporate Governance
Direct Tax Committee
Indirect tax Committee
Professional Development Committee
Continuing Professional Education Committee
International Affairs Committee
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Key Non-Standing Committees - 2
Board of Discipline
Peer Review Board
Financial Reporting Review Board
Capacity Building Committee
Perspective Planning Committee
Committee on Members in Industry
Committee on Internal Audit
ICAI-ICWAI-ICSI Committee
Vision Committee
Audit Committee
Government Accounting Committee
Management Accounting Committee
Public Finance Committee
Diamond Jubilee Committee
The Institute is responsive to the emerging
challenges and constitutes new committees for
effectively meeting these challenges Research
Unit ICAI-Accounting Research Foundation
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Organisation Structure
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Institute Functions
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ICAI A Key National Body

• Offers inputs to
• Comptroller Auditor General of India
• Ministry of Company Affairs, Govt. of India
• Reserve Bank of India
• Securities and Exchange Board of India
• Central Board of Direct Taxes
• Insurance Regulatory and Development Authority
• Departments of Central and State Governments
• Departments of Public Enterprises

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Profession is aligning itself with changing
imperatives

• Convergence with International Standards of
  Accounting and Auditing
• Review and Revision of Education Curriculum.
• Upgrading skill set in newer areas
• Facilitating Consolidation amongst Smaller Firms
• Corporatization for MCS work
• Recent change in Regulatory Framework
• Multidisciplinary Firms and LLP on anvil
• Making CPE mandatory
• Profession ready for opening up under WTO/ GATS
• Introduction of Peer Review System, Financial
  Reporting Review
• Focus on internet auditing

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International Presence

• ICAI is founder member of IFAC, CAPA, SAFA and
  IIN
• ICAI represented in
• IFAC - Board, Education Standards Board, SMP
  Committee, Developing Nations Committee,
  International Public Sector Accounting Standards
  Board, Professional Accountants in Business
  Committee
• CAPA President Board member
• ICAI holds Permanent Secretariat, SAFA
• SAFA - Chairmen and member of various Committees
  and Working Groups

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International Initiatives

• ICAI being consulted by IAASB in Audit Standards
  Setting and by IASB in IFRS setting
• Playing a lead role in the area of Developing
  Nations, SMPs and SMEs, International Public
  Sector Accounting Standards, International
  Education Standards
• SAFA adopted ICAI curriculum as model
• Student exchange programs held with ICAB, ICAP,
  ICAN and ICASL
• Opened an Office in Dubai
• Opened Chapters in Melbourne, Toronto, Port
  Moresby (Papua New Guinea) , Sydney and Oman.
• Invitation to Institutionalization of Profession
  in countries like Oman etc.
• Initiatives for recognition of ICAI qualification
  by accounting bodies in other countries

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Important Initiative Undertaken to Align with
Changing Economic Order

• Alignment of Indian accounting standards with
  IFRSs
• Alignment of Auditing Standards with
  International Standards
• Change in education and training curriculum
• Launch of Post Qualification Courses Capacity
  building of firms
• Mandatory CPE Requirement
• Peer Review Mechanism
• Financial Report Review
• Brand building Nationally and Internationally
• Focused approach on issues relating to Corp.
  Governance.
• Facilitating changes in regulatory frames.
• Vigorous pursuance of Mutual Recognition
  Agreements.
• Arrangement with Universities for graduation
  qualification to CA students
• Facilitating accounting reforms in various areas

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Examples of Involvement of ICAI in National
Organizations

• Drafting of Income Tax Laws
• Drafting of Competition Law
• Drafting of Company Law
• Capital Market Development and Regulation
• Corporate Governance
• Accounting Utilization of Governmental
  resources
• WTO GATS
• Import Export Policy
• Commercial and Economic Legislations
• Non Banking Financial Companies

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Education and Training

• Distant Mode of Education
• Education Through Accredited Institutions and
  Branches
• Meets the requirements of international
  educational pronouncements of IFAC
• Comprehensive theoretical and practical
  curriculum
• Continuous review of the curriculum

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Highlight of the New Scheme of Education
Training

• I Common Proficiency Test
• Compulsory
• II 3½ years of Practical Training concurrent with
  components of Professional Competence Examination
  (PCE) and Final
• Complete 100 hours of Compulsory Computer
  Training before appearing for PCE.
• Undergo General Management Communication Skills
  (GMCS) after 18 months of practical training and
  completion of PCE
• Eligible to appear for Final Examination on
  completion of 3 ½ years and passing of PCE

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Highlights of the New Syllabus

• Financial Reporting
• Corporate Financial Reporting
• IFRS based Financial Reporting
• US GAAP based Financial Reporting
• Strategic Management
• Study of Business Environment
• Understanding Strategic Planning and Analysis
• Ability to understand and formulate Functional
  Strategies
• Financial Management
• Advanced Management Accounting
• Information Technology and Systems Control
• Business Ethics

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Examination

• One of the largest Accounting examination
  networks
• Administrative conduct of examination and exam
  related process largely computerized
• Exams are held twice a year
• Examination system considered to be of high
  standard integrity worldwide
• Has been lending expertise to accounting bodies
  in other countries

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Accounting Standards Convergence with IFRSs

• ICAI has decided to converge with IFRSs from
  accounting periods commencing on or after 1st
  Aril 2011 for listed entities and other public
  interests entities such as banks, insurance
  companies and large-sized entities
• For smooth transition to the IFRSs, ICAI will
  take up the matter of Convergence with NACAS, and
  various regulators such as the RBI, SEBI and
  IRDA.
• ICAI would also formulate its work-plan to ensure
  that IFRSs are effectively adopted from 1st April
  2011.
• IFRSs-specific training programs will be
  organized for its members and others concerned to
  prepare them to implement IFRSs.
• IASB has also offered to help the ICAI in its
  endeavors towards Convergence with IFRSs in India

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Convergence with IFRSs in India

• Recognizing the need for convergence in India,
  Council of ICAI decided to converge with IFRSs
  from accounting periods starting from 1st April
  2011 for
• for public interest entities including listed
  entities, banks, insurance entities and other
  large sized entities,
• subject to its confirmation by government and
  other legal and regulatory authorities

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Strategy for Implementing Convergence with IFRSs
in India

• For Implementing Convergence with IFRSs from 1st
  April 2011, ICAI has identified following issues
  to be resolved

• Cooperation from Legal and Regulatory Authorities
• Level of preparedness of Industry
• Education and Training of auditors and prepares
  of Financial Statements
• Work Plan of ASB for smooth transition to IFRSs
• Conceptual Issues with IFRSs

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Constitution of the Group on Implementation of
Convergence

• For resolving various issues, ASB of ICAI has
  Constituted Group on Implementation of
  Convergence with IFRSs, which constituted
  following subgroups

• Sub-Group for preparing the Work Plan of ASB and
  liaising with the IASB
• Sub-Group for approaching the Government and
  Regulatory Authorities
• Sub-Group for liaising with the Industry
  Associations
• Sub-Group on Education and Training on IFRSs

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Auditing Assurance Standards

• On the Road to Convergence
• AASB founder member of IFAC
• AASs issued based to the extent possible on
  corresponding International Standards (IS)
• Chalked out timeline for bridging gap in
  convergence with IS
• Standard on Quality Control benchmark with ISA
  finalized

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Auditing Assurance Standards

• 35 AASs
• 27 Guidance Notes on auditing issues
• 04 Industry specific Guidance Notes
• Banking General Insurance
• Stockbrokers Life Insurance
• Milestones
• AAS 12, Responsibility of Joint Auditors
• Statement on the Companies (Auditors Report)
  Order, 2003
• Study on Money Laundering

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Research and CPE

• Commitment to advancement of knowledge in
  accountancy, auditing, taxation and allied areas
• Published about 150 Publications
• Expert Opinions on Applicability of Standards
• 20 Compendiums over 1000 opinions
• More than 50 CPE materials published
• 3000 CPE programs held annually
• ICAI-ARF to promote research on contemporary
  issues
• Publishes a monthly journal with more than
  175,000 circulation

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Professional Ethics

• Cardinal Principles
• Service before self
• Extends beyond the legal requirements
• Some major highlights

• Prohibition on other occupations
• Prohibition on solicitation
• Prohibition on advertisement and Canvassing
• Prohibition on financial interest in auditee
  company
• Restriction on number of audits

• Limit on fees for non-audit assignments
• Prohibition on writing Books of Accounts of
  Auditee company
• Demarcation between External and Internal
  Auditors
• Professional fees for audit and other services
  received by a firm not to exceed 40 of the gross
  annual fees of the firm

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Professional Development

• Identifying Role of Profession in emerging areas
• Developing Practice Areas
• Upgrading and updating the knowledge and skill
  sets
• Developing technical material to facilitate
  practice in new areas
• Considered as critical in the changed Scenario

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Quality Control Initiative Peer Review

• Peer Review Board of established in March 2002
• Focus on
• Technical Standards compliance
• Quality of Reporting
• Office Systems and Procedures (attestation
  services only)
• Staff training Programmes (attestation services
  only)
• 3378 Strong panel of Reviewers maintained
• 2430 Reviewers have undergone training
• 1231 Practice units have been issue Peer Review
  Certificates
• The Council of the Institute accepted the request
  of SEBI that audit of listed companies shall be
  carried out by the auditors who have undergone
  Peer Review Process

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Quality Review Board

• Central Government has constituted Quality Review
  Board consisting of 11 persons.
• Council of ICAI has nominated 5 members on QRB
• Chairman and other 5 members have been appointed
  by Central Government
• All services provided by members (Both
  attestation and non attestation will be subject
  to Quality Review)
• Disciplinary action if there is a deficiency in
  service

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Peer Review

• Peer Review Board established in March 2002
• Reviews by Board to ensure
• compliance with technical standards and
• existence, compliance and adherence to quality
  control
• policies and procedures
• Findings would not have any relationship with the
  disciplinary proceedings

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Financial Reporting Review

• Financial Reporting Review Board constituted in
  2002 to review general purpose financial
  statements of certain enterprises
• Boards findings would form basis for
• initiating action against auditor concerned and
• informing irregularity to relevant regulatory
  authority
• Board seeks general purpose financial statements
  of top 500 companies in India on yearly basis

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Code of Ethics
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New Initiatives

• Establishment of Accounting Standards
  Interpretation Sub-Committee
• Launched the Virtual Institute Project providing
  e-services to members and students
• Cap on fee for rendering services other than
  audit
• Disciplinary mechanism framework
• Recast professional curriculum
• Bridging the expectation gap
• Common logo for the profession
• Networking of Firms

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ICAI - Virtual Institute

• Virtual Institute integrates all the regions
  and offices to present a unified view of the
  operations of the entire Institute through a
  single integrated enterprise system
• It FULFILLS the members and students right to
  convenience, comfort and make the benefits of
  Information Technology (IT) available to the
  members and students for rendering the Institute
  services online anywhere-anytime
• With this all operational functions of the
  institute have been brought onto a common
  intranet with seamless flow and availability of
  information
• Towards Tomorrow ? Today
• ICAI started IT initiative towards a bright
  future and is in it today
• ICAI Portal is effectively used to make a
  repository of information and knowledge
  accessible to the members, students and employees
  at the click of a button.
• The portal brings dynamic features to the
  content. It functions as a Global Gateway to
  ICAI. The portal provides a single interface to
  users for accessing Institutes services taking
  into consideration security requirements.

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The Institute of Chartered Accountants of India
Set up by an Act of
Parliament ICAI Bhawan, Indraprastha Marg, New
Delhi 110 002. Phone [phone],
30110210 Website www.icai.org