CAduniya.com : CA India Blog

Proposal for Nomination of Chartered Accountants u/s 14A and 14AA of the Central Excise Act, 1944 for special audit

Sections 14A and 14AA of the Central Excise Act, 1944 provide for special audit, under certain circumstances, to be done only a Cost Accountant, and not by a Chartered Accountant.

In this connection, it may be mentioned that a Chartered accountant is a professional who is regulated by the Chartered Accountants Act, 1949 and has been given the onerous responsibility to attest the fairness, correctness of financial statements as also certify the tax compliance under Income Tax Act, 1961. The syllabus of the final examination has a paper on indirect taxation which tests the in-depth knowledge of the person in this subject. Every Chartered Accountant goes through rigorous 3-years articleship training, which is unparallel in India for any other professional course. A Chartered Accountant possesses complete knowledge of indirect taxation, skill of doing audit and the experience of audit and taxation. There are many Chartered Accountants who have been authoring books on central excise for decades and some of them have been part of important Committees including the Kelkar Committee. Further, there are insignificant number of practising Cost Accountants available, particularly in smaller cities/town, in comparison to the vast and geographical spread of Chartered Accountants in practice, whose number is ever increasing. The Chartered Accountants are not only highly skilled and fully equipped to handle special audits, but are also easily available.
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Beating the slowdown, chartered accountants (CAs) have bagged jobs with top-notch companies in the latest campus placement drive, which has also seen more newly qualified professionals get jobs.

State-run companies, especially from the financial services sector, have emerged as the biggest recruiters in the current round of hiring.

Four newly-qualified members of the Institute of Chartered Accountants
of India (ICAI), the apex body governing the profession, have been offered Rs 23 lakh each for international posting by the Tolaram group, a Singapore-based private company, compared with last year’s highest salary of Rs 21 lakh.

“When institutions of international repute are finding it hard to attract companies to their institutes to place their handful of students, the ICAI has proved itself to be an important destination to recruit finance, audit and compliance executives,” said ICAI President Uttam Prakash Agarwal.

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The government will prevent chartered accountants (CAs) from offering consultancy and advisory services to the companies which hire them for auditing their accounts. This is being done to lend greater credibility to company accounts. The statutory auditors, who vet the financial accounts of a company, will be restricted from providing their corporate clients services such as investment management, actuarial services and investment banking. The proposal forms part of the Companies Bill 2008, currently pending before the Lok Sabha. The move is expected to usher in greater independence in the audit function and infuse greater confidence in the minds of investors on the credibility of financial statements. At present, the statutory auditors are barred from providing accounting and internal audit services for their clients, but are allowed to deliver consultancy and advisory services. Under the guidelines proposed in the new legislation, statutory auditors will also be prohibited from providing services like design and implementation of financial information system, investment advisory, rendering of outsourced financial work and management services. The initiative assumes significance in the wake of a slowdown in the economy where companies may hire consultancy services from their statutory auditors who may turn a blind eye to discrepancies in financial statements. “The proposal seeks to place specific restrictions on the services which a chartered accountant, acting as a statutory auditor, can provide for his client,” says Institute of Chartered Accountants of India president Ved Jain, adding the proposal will help avoid conflict of interests. The move may come as a major damper for many practising CAs who have been providing audit as well as consultancy services for their clients. According to Ernst and Young India director Rahul Roy, the proposal can lead to a great shakeup within the accounting profession. He, however, agreed that the move is in line with globally followed practices.

NEW DELHI — India’s government will increase spending and ease some taxes in an effort to stimulate an economy that has been hammered by the global economic slowdown and the recent Mumbai terrorist attacks.

The measures on Sunday came a day after the country’s central bank cut benchmark interest rates in the hope of cushioning the downturn.

The government said it will spend 200 billion rupees ($4 billion) more than previously planned, bringing expenditures to a total of three trillion rupees over a four-month period through end of the fiscal year on March 31.

The office of Prime Minister Manmohan Singh also signaled that more spending increases would be needed in the next budget year.

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To meet the growing demand for chartered accountants, the Institute of Chartered Accountants of India (ICAI) has upped its intake of students.

It admitted a record 125,000 students last year. This year, after exams are conducted in May and November, the institute plans to take an even higher number of students.

As a result, ICAI hopes there will be an annual addition of around 25,000 to the army of chartered accountants in the country from 2010 onwards. This is more than double the 10,000 to 12,000 chartered accountants it churned out annually between 2001 and 2006. The student intake then averaged between 35,000 and 40,000.

With the boom in the corporate sector, there has been an unprecedented rise in the demand for chartered accountants in the last few years and this has improved their remuneration manifold. The average annual pay packages in the last round of placements at the ICAI too touched a new high of Rs 5.94 lakh, compared with Rs 4.79 lakh in 2007.

Aware of the growing demand for skills commensurate with basic tasks like accounting and book keeping, the ICAI recently launched a two-year course aimed at creating a second tier of accountants. This will lead to another 50,000 accountants being produced annually, taking the total number of accountants to around 75,000.

While there are no definite numbers on the shortage of accountants, experts say the deficit will be massive. “Given the current boom in the economy, along with other reasons like increasing financial norms and risk management in companies, the need for skilled accountants is bound to rise,” an expert said.

“There is no estimate as of now but a report of the Ministry of Human Resource Development has put the shortage of finance professionals in the country at around 200,000 by 2009,” Amit Azad, a consultant said.

Besides opening up computer labs across the country to impart IT training to CA students, ICAI is also coming up with a 25-acre campus at Jaipur that will be developed into a centre of excellence where students will be taught management skills in a three-month residential programme.

Encouraged by the rising student registration, both in the country as well as abroad, the ICAI has, from this year, allowed articleship training overseas as well. Earlier, a student pursuing the chartered accountant course abroad had to come to India for a three-year articleship training.

“ICAI is conscious of the need for skilled as well as employable workforce. We are confident that we will meet the requirement of the growing economy. There is no restriction on the student intake and with our teaching expertise, infrastructure and growing membership, we are hopeful to bridge the skill gap in future,” ICAI president Ved Jain said.

ource: Business Standard

In what could be a significant deterrent to corporate frauds, the concept of rotation of partners received a green signal from the apex body for chartered accountants, Institute of Chartered Accountants of India (ICAI), and mandates change of partners after seven consecutive years with a listed company.

The step, cleared by ICAI, will be operational from April 2009 and is expected to significantly reduce complexity between individual partners in audit firms and their assigned companies, something that has been a cause behind many of the big corporate frauds to have hit the financial world.

“We have cleared rotation of partners and this would come into force from April 1, 2009 only for listed firms, ICAI president Ved Jain said.

Professional Development Committee has organized a Global CA Networking Summit to facilitate Networking among CAs practicing in India as also abroad. The Summit will enable delegates to meet professionals interested in Networking, exchange views and thoughts, understand the imperatives of Networking and even sign MOUs in the presence of dignitaries from the Ministry, President or Vice President of ICAI.
The Summit will be addressed by eminent professionals like Mr Ashok Wadhwa and Mr Gautam Doshi. Participants may identify firms for networking and set up meeting in advance
Mentoring is the key component of this Summit and besides Mr Ashok Wadhwa and Mr Gautam Doshi, other professionals will provide guidance and mentoring; understand specific issues being faced by members in Networking and advise them on the possible solutions.
Ministries have also indicated initial interest in participating in the Event. Exact details for the participation fee and like are being worked out and details will be posted on ICAI Website

First 30 Overseas delegates registering for the Summit will receive invites from Ministry of Overseas Affairs to participate in the dinner hosted by the Ministry on the eve of the Pravasi Bharatiya Divas at Delhi.
For online registration form, (please select seminar option) ? (to map this URL: http://220.225.137.148/ICAI/Conference.jsp)

By P. S. Kumar - Source : Sify

Accounting is a means to an end and not an end in itself. Accounting follows business. The function of accounting is to ensure that business transactions are recorded in a transparent manner reflecting the economic substance of them. As business transactions get more and more complicated and as newer business models are invented, sometimes it does look as though the existing accounting standards and the accounting theory are not adequate to record those transactions.

In fact, anyone with an accounting bent of mind who reads business journals and newspapers, on coming across these new ventures would immediately think of an accounting framework and its adequacies or otherwise. In the wake of this, it is not uncommon to find that the standards do not address some specific and unique issues related to these ventures and their business models.

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MUMBAI: As a first move towards making India the first country to adopt accounting standards on carbon emissions, the board of ICAI (The Institute of Chartered Accountants of India) has constituted a group which will come up with the draft guidelines before March 31, 2008.

The group, set up on December 11, will be headed by ICAI accounting standards board chairman, Amarjit Chopra. When contacted, Chopra said the group will look into development of accounting and disclosure practices on emissions trading. The group will study the full scope and relevance of the carbon market from India’s point of view.

ICAI president Sunil Talati said, the group will seek clarity on how corporates need to treat the income earned from carbon credits. “There is a view that carbon credits should be recognised for the purpose of accounting after they have been traded. The group is likely to seek views of corporates like SRF and Coal India.” 

Source: TOI 

CAs  (Chartered Accountants) in India Close In On MBAs In Salaries,ICAI Campus Placement Sees Jump In Average Package To Rs 6 Lakh

MBA finance grads watch out, CAs are inching closer in terms of pay packages. In the latest round of placements of CA, held last month, average salaries have shot up to almost Rs 6 lakh per annum. The average salary of CAs reached to a new high of Rs 5.94 lakh compared with Rs 4.79 lakh in February-March, 2007. Of late, Institute of Chartered Accountants of India (ICAI) has been working hard to prepare its members to compete with MBA students. The institute has also introduced changes in its curriculum to groom new students as per the changing scenario. In his recent message to its members, ICAI president Sunil Talati said, “I must say that the new breed of young students are so smart and intelligent that the number of students passing out in final examination and becoming our members is increasing every year. This is a good sign. It is not that the examination papers are easy, or results are liberal; it is in fact a sign that new young intelligent and talented students are joining our profession appreciating the new curriculum.”

The campus placements were not limited to about 100-odd students like typical B-schools. There were as many as 1,151 students recruited out of 1,823 students who participated in the September-October campus placements. There were 101 companies comprising 252 interview panels participated at 19 centres in campus interviews, organised by ICAI. “A number of students could not get the job profile and company of their choice since we do not allow students to appear in more than six interviews. However, they will be able to find the suitable opportunity through our online platform from where headhunters can access to our data base,” said ICAI chairman of committee for members in industry Uttam Prakash Agarwal. Not only banks and financial institutes but a number of IT, energy, telecom, engineering, FMCG and aviation companies also participated.
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Don’t be surprised if your organisation receives a directive from the Institute of Chartered Accountants of India (ICAI) asking you to verify the membership of your chartered accountant (CA). The ICAI, a statutory body established under the Chartered Accountants Act 1949, will soon ask companies to ensure that CAs employed by them are registered members of ICAI.

ICAI has already started shooting letters to major corporate houses to ensure that they verify the membership of their CAs. It is estimated that as many as 60,000 CAs are not registered with ICAI that is empowered to take disciplinary actions against its members in case of any accounting malpractice. ICAI believes that there are at least 15,000 to 20,000 CAs employed in India who are not the members of the institute. CAs now settled out of India are also not enthusiastic about retaining their membership with ICAI since they are practicing under the foreign authorities. “Companies employing CAs must ensure that they are registered with ICAI so that the institute can take disciplinary action against him or her in case of any accounting fraud or violation of code of conduct,” chairman, ICAI’s Committee for Members in Industry, said Uttam Agarwal.

He added that ICAI will not be able to punish the culprit CA if he is not registered with institute in the scenario when accounting standards are becoming stringent day by day. According to Mr Agarwal, CAs avoid registration on account of carelessness since corporates ask only for their passing certificate at the time of recruitment and not the registration number with ICAI.

The registration and renewal fees are very much nominal for membership, he said. It may be mentioned here that CAs in the industry have now outnumbered the practicing CAs. Out of about 1.40 lakh CAs, about 75,000 are employed in the industry. With increasing rush of corporates to the ICAI centres for recruitment, the institute has made it mandatory for fresh pass outs to apply for membership before participating in the campus interviews

After nearly two decades, the Institute of Chartered Financial
Analysts of India (ICFAI) has won the `chartered’ row against the ICAI
(Institute of Chartered Accountants of India).

In a decision dated May 16, the apex court ruled in favour of
the Hyderabad-based ICFAI, by setting aside an earlier verdict of the
Andhra Pradesh High Court, which had allowed the ICAI to prohibit its
members from using the description `Chartered Financial Analyst’ or its
abbreviation, CFA.

The dispute goes back to the late 1980s when the ICAI, the
premier accounting body headquartered in New Delhi, initiated action
under the Monopolies and Restrictive Trade Practices (MRTP) Act against
the ICFAI, after having obtained the opinion of the Additional
Solicitor General of India in this regard.