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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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MUMBAI: Indian markets defied expectations of continuation of bull-run as investors who were stuck holding stocks at higher levels utilised the opportunity to reduce their portfolio by booking handsome profits.

While a group of investors cashed in profits, others bought on dips sensing revival in economic growth on hopes of a stable government. This resulted in a huge volatility in early session.

Market gave a thumbs-up to the UPA’s victory in 2009 general elections. The new government is expected to carry forward economic reforms more aggressively as it will not be bogged down by the Left parties or other regional parties. Trade halted on Monday after the benchmarks surged around 20 per cent triggering to two-upper circuits for the first time ever.

“We believe investors should use this opportunity to exit from the market as we anticipate a descent to levels of 13,500–13,750. While we recommend that every dip should be used as opportunity to enter into the market, it would be prudent to book profits at 14,800–15,000 levels. For the day we are positive on the market but advice profit booking at higher levels,” said Religare Securities report.

At 10:45 am, Bombay Stock Exchange’s Sensex was at 14386.81, up 102.60 points or 0.72 per cent. The 30-share index witnessed sharp volatility of over 900 points in early trade. The index touched an intra-day high of 14757.82 and low of 13834.13.

National Stock Exchange’s Nifty was at 4328.80, up 5.65 points or 0.13 per cent. The index swung 300 points early in the day between intra-day high of 4464.90 and low of 4167.65.
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Indian IT firms would not be impacted by the tax reform proposal of US President Barak Obama, Infosys Technologies chairman and chief mentor N.R. Narayana Murthy told President Pratibha Devisinh Patil on Friday.

“Obama’s tax proposal will not impact Indian firms as they already pay taxes in the US. It is only American firms operating in India who would have to repatriate taxes on profit earned outside the US when it becomes a law,” Murthy told Patil at an interactive session at the Infosys campus.

The president, who is on a three-day visit to Karnataka since Thursday, paid a visit to the sprawling Infosys campus housing its corporate headquarters on the outskirts of this tech hub.

When the company’s top management made a power-point presentation on its global operations during the interactive session, Patil also asked Murthy how the Indian IT industry could cope with the pressures of global recession and lower technology spending.

Murthy replied that the industry could sustain the growth momentum by expanding into the domestic market and driving the growth rate with innovation and product development.

“Indian firms will have to safeguard their IPRs (intellectual property rights) to move up the next level of value chain and compete with their peers in a global market,” Murthy argued.

“The president was keen to know about our guiding spirit and principles that drive Infosys’ growth in the global market,” Murthy told reporters later. President Patil planted a sapling in the Infosys campus and went on a buggy ride to see for herself the company’s state-of-the art facilities.

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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MUMBAI: Expecting a reduction in lending and deposit rates by banks, the Reserve Bank of India on Tuesday reduced the key indicative short-term rates by 25 basis points.

“Within the policy rate adjustment already effected by the RBI, there is scope for banks to further reduce lending rates so as to ensure credit flow for all productive economic activity. We hope and expect that banks will play their part in the economic adjustment process by passing on the benefits of lower interest rates to their customers,” said RBI Governor D. Subbarao while announcing the Annual Policy 2009-10

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According to Commtrendz Research’s report on Indian Rupee, immediate supports are at 50.02-49.93 followed by 49.65-49.55. Immediate resistance
falls around 50.50/50.60 followed by 50.90-51.00 levels.

Commtrendz Research has come out with its report on Indian Rupee MCX-SX futures, “The MCX-SX April Rupee futures opened weaker at 50.10, lower by 21 paise from previous close but quickly strengthened to 49.98 at 9:15 am. The BSE Sensex opened higher at 11065 and was seen trading at higher at 11141 at 10:15 am. The Euro continued its downslide against the dollar on Monday due to uncertainty over policy steps that the European Central Bank
may take and due to concerns the European economy will deteriorate further. It fell to its lowest in a month against the dollar. The Dow Jones traded in a narrow trading range and closed higher by 6 points on Friday. One-month offshore non-deliverable forward contracts were quoting at 50.08/18, weaker than the onshore spot rate. Most Asian currencies were also trading weaker
against the dollar.”

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MUMBAI: Fears about further capital outflows from India on back of a sovereign downgrade and lower corporate earnings continue to weigh down on
the rupee, pulling it down to another all time low of 51.73 against the dollar at 12 noon.

It had ended at 51.45 level on Friday. Dealers say Asian stocks continuing to lose way and concerns of India trade deficit rising further is also weakening the outlook for the rupee. BSE sensex was trading lower 2.3% at 8690 at 12 noon.

“We are still betting on some form of aggressive RBI intervention curtailing extreme depreciation pressures and subsequently bring the USD/INR pair towards our near-term equilibrium range of 52,” says Abheek Barua, chief economist at HDFC Bank in a note. “In short a break beyond 52 could just be temporary,” he added.  - Source : ET

New Delhi: Having managed to keep passengers fares in check for the last five years, Railway Minister Lalu Prasad is expected to announce more sops for train travellers when he presents the interim railway budget in Parliament on Friday.Though it is a vote-on-account exercise, sources in the ministry said Lalu is keen to share the benefits of the reduction in Oil prices with passengers.

The railway minister would have got an upper hand over Rail Bhawan bureaucracy if he announces a reduction of 8-10 per cent in AC-III tier and second-class sleeper fares in his last Budget tomorrow. Government officials said the minister was keen on gifting lower fares to the janata in an election year despite resistance within the ministry. While this may be the case, airfares in key sectors had almost dropped to AC-III tier levels a week or 10 days back before bouncing back earlier this week.

Besides lower fares, Lalu Prasad’s populist budget for 2009-10 will include a substantial investment of Rs 12,000 crore for the ambitious East-West freight corridor. It starts from Kolkata and terminates at Mumbai, touching Ludhiana en route. The minister is keen to ensure freight corridors are executed in time to enable faster movement of goods. Given the increase in the number of passenger traffic on existing routes, the railways had favoured faster movement of goods through a dedicated line.

Union Minister for Railways Lalu Prasad has said that the country can once again expect a good Railway Budget. “Despite the recession and increase in fuel prices, Indian Railways have done well. You can once again expect a good Budget,” said Lalu. With General Elections looming, Lalu is expected to announce more sops for the aam aadmi. He may announce some new trains and a cut in the fares. (10.58am IST)

Mumbai (PTI): The Institute of Chartered Accountants of India (ICAI) on Wednesday said that it was considering moving court seeking permission to interrogate scam-hit Satyam Computer’s erstwhile promoters. This was stated by ICAI President Uttam Prakash Agarwal at a press conference here.

The ICAI would also seek court permission to interrogate Satyam’s erstwhile chief financial officer, Agarwal said. B Ramalinga Raju was Chairman of Satyam while Vadlamani Srinivas is the erstwhile CFO of Satyam. The ICAI is a body that regulates chartered accountants’ profession in the country.

The Institute of Chartered Accountants of India (ICAI) is a statutory body established under the Chartered Accountants Act, 1949 for the regulation of the profession of Chartered Accountancy in India. During its nearly six decades of existence, ICAI has achieved recognition as a premier accounting body not only in the country but also globally, for its contribution in the fields of education, professional development, maintenance of high accounting, auditing and ethical standards. ICAI now is the second largest accounting body in the world.

The Curriculum of the Chartered Accountancy Course has been designed, developed and maintained so that the members of the Profession can become the valued Trustees of the World Class Financial Competence, Good Governance and Competitiveness. For details regarding the curriculum, please refer to Annexure 1.

Since December 1949, the Chartered Accountancy Examination is held twice in a year. The Final exam was held in November, 2008 in 190 Examination Centers spread over 106 cities all over India and 3 cities abroad.

Today, the Results of Chartered Accountancy Final exam & Common Proficiency Test (CPT) have been declared. CPT is the entrance level route to Chartered Accountancy stream which every intending candidate has to clear before enrolling for the Professional state.

Source / image credit : ICAI (www.icai.org)

 Feb. 6 (Bloomberg) — Satyam Computer Services Ltd., the Indian software provider at the center of the country’s biggest fraud investigation, rose in Mumbai trading after it named a chief executive officer ending four weeks of leadership vacuum.

Satyam rose 5.5 percent to 49 rupees at 10:01 a.m. local time, the most since Feb. 2. The benchmark Sensitive Index rose 1 percent.

A. S. Murty, a 15-year Satyam veteran, was yesterday named CEO and tasked to help reassure clients, creditors and employees that the Hyderabad-based provider can survive, while the board evaluates bids from Larsen & Toubro Ltd. and other suitors. The company has been run by state-appointed directors since its founder and former chairman Ramalinga Raju said he falsified accounts.

The 50-year-old electrical engineer who oversaw global delivery of the company’s services in his previous role as chief delivery officer may have his task cut out trying to keep customers from joining State Farm Mutual Automobile Insurance Co. in canceling contracts.

“The stock should react positively because one part of the work is over,” Tarun Sisodia, a Mumbai-based analyst at Anand Rathi Financial Services Ltd. said yesterday. “The uncertainty over the company’s future, however, will remain in investors’ minds as long as there isn’t clarity about the financials.”

Satyam said on Jan. 23 that selecting a CEO and finance chief was critical for the company and its investors after the scandal wiped out about 80 percent of market value in less than three weeks.

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MUMBAI: Beleaguered IT major Satyam Computer today surged over 31% on country’s two main bourses, amid software company iGate expressing interest n acquiring parts of the company.

Shares of Satyam surged 31.25% to settle at Rs 38.85 on the BSE. During the trade the scrip had surged to a high of Rs 39.30, on the BSE.

Analysts said that the gain in Satyam scrip was mainly due to acquisition rumours doing rounds about the IT firm.

iGate CEO Phaneesh Murthy today said that the company was interested in initiating talks for a possible acquisition of some businesses of Satyam.

“We are interested in a dialogue with Satyam and currently are quite keen and comfortable to acquire selective portions of the business,” Murthy said.

On the National Stock Exchange, the scrip closed with a gain of Rs 38.85, up 31.25 per cent after touching an intra-day high of Rs 39.35 on the NSE.

Over 20.26 crore shares got traded on the NSE, while 11.14 crore shares changed hands on the BSE.

Satyam’s director Tarun Das had earlier said that the company had been approached by Indian and international IT companies and that the board would decide on it.

Murthy said that, “We have to wait for the new board at Satyam to evaluate all strategic options and based on that evaluation, set the direction for the company, before we disclose what our strategic plan is.”    - Source: TOI

Hyderabad, INDIA, January 23, 2009: Satyam Computer Services Limited (NYSE: SAY) today announced key decisions concluded at its Board meeting, held on 22nd and 23rd January, 2009  in Hyderabad.
This meeting, the third in thirteen days since its reconstitution, was chaired by Mr. Tarun Das. The meeting focused on issues that are a priority for ensuring [read more]

The chartered accountants regulator ICAI on Thursday said KMPG cannot audit Satyam’s books, but the global auditor said it does not require to register with the regulator to restate the IT company’s accounts.

“KPMG is not allowed to practice in India… they are not registered with us,” ICAI president Ved Jain said, while cautioning scam-tainted Satyam against going ahead with this auditor.

Satyam’s new board has mandated KPMG and Deloitte to restate the company’s financial statements, after founder Ramalinga Raju admitted cooking of accounts to inflate profits and create fictitious assets.

Reacting to ICAI’s caveat, KPMG said: “It is our understanding that the scope of work (at Satyam) to be finalised is not reserved for CAs registered with the Institute of Chartered Accountants of India.”

“We are working with the new board of Satyam Computer. The scope of work and terms of reference are being discussed with a view to their finalisation,” a KPMG spokesperson said.

KPMG and Deloitte were brought in on Wednesday even as Satyam’s bookkeeper Price Waterhouse said that its audit of the IT company’s accounts may be unreliable given Raju’s admission of a financial fraud running into thousands of crores of rupees.

© Copyright 2008 PTI. All rights reserved.

Source / via: MSN

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Read all about satyam scandal at www.ghotala.in

• Satyam’s lifeline? Rs 1700 crore receivable
• A 23 year old Satyam employee commits suicide fearing job loss
• Investigators probing the financial manipulation, Raju’s accounting skills seem to be too good to crack.
• Government not to bail out Satyam Computer
• Satyam urgently needs Rs 150cr: Mynampati
• Insider trading in Satyam?
• What more? Satyam bosses sold most shares ahead of scam
• The new Satyam board has made it clear that it is not interested in a government bailout for the IT company
• Satyam Raju avoiding probe in Satyam scam, claims SEBI
• Do you know Satyam Raju had 50 bank accounts in 2002

Read all about satyam scandal at www.ghotala.in

NEW DELHI: Chartered accountants body ICAI on Saturday served a showcause notice on auditor and asked it to submit balance sheets of Satyam Computer audited by it in the last five years.

“We today served showcause notice on Price Waterhouse and asked it to reply within 21 days,” Institute of Chartered Accountants of India (ICAI) President Ved Jain said.

If the reply to the notice does not come by 21 days, all members of Price Waterhouse who audited the Saytam accounts could be banned for life time, Jain said.

The firm has also been asked to submit balance sheets, financial statements and other relevant documents of Satyam Computer audited by it for the last five years, he said.

The audit firm has maintained that it followed applicable audit standards and went by audit evidence provided by the company.

The ICAI President said action against CAs, who audited the accounts of Satyam Computer, can be expected in 2-3 months, if found guilty.

However, the institute cannot take action against the firm, he said.

Jain said the institute would expedite the process this time as the amendment of the Chartered Accountants Act in 2006 has enabled ICAI to accelerate the proceedings.

CAs found either negligent or party to the fraud could face a life-time ban on practising, Jain said.

The institute has taken action against 122 CAs for various kinds of irregularities in the last three years with one of them even being barred for life time, he said.

Jain said Satyam founder Ramalinga Raju’s statement that only he knew about the financial wrong-doings did not look like the whole truth, as he did not write the accounts of his company.

Ramalinga Raju in a letter written to the company board admitted, “…None of the board members, past or present, had any knowledge of the situation in which the company is placed.”

Read all about satyam scandal at www.ghotala.in

KOLKATA: The Institute of Chartered Accountants of India (ICAI) has decided to issue a show cause notice to the auditors of Satyam Computer Services in the backdrop of Satyam Computers chairman B Ramalinga Raju’s sensational revelations on Wednesday.

Talking to ET, ICAI president Ved Jain said: “We have set the ball rolling. On the basis of statements made by Mr Ramalinga Raju, ICAI has already initiated proceedings against the concerned auditor. Under legal provisions our disciplinary committee can take cognizance of information from external sources and initiate action against our members. On the basis of the statement, a show cause notice will be sent to the auditor of the Satyam Computer Services.”

Asked specifically, who the notice was being sent to, Mr Jain said: “I am told the audit firm was PricewaterhouseCoopers. A show cause notice will soon be sent to the auditor. This is indeed a situation where fingers are being pointed towards some chartered accountants.”

On the issue, an ICAI council member who declined to be named said: “As auditors, we definitely have a role to play. This incident gives the entire chartered accountants fraternity a bad name. If we unravel any wrong doings on the part of the auditors, the institute (ICAI) will initiate action against the concerned auditor. Auditors base their observations on documentary evidence provided to auditors and Mr Raju did not mention that the figures provided to auditors were wrong. However, if the auditors have failed, the institute will file an ‘Information Case’ against the concerned individual (at PwC, in this case) as a first step.”

The ICAI’s Council is a core team that deals with critical aspects of running the Institute and policy matters involved as well as various accounting norms.

Experience, however, shows the process of ruling on such cases takes time. For instance, ICAI had initiated proceddings against the auditors of the erstwhile Global Trust Bank (GTB) a couple of years ago. The case is yet to be diposed off, the council member said.

Read more about satyam scandal

Shares in Satyam Computers, the Indian software company engulfed by the country’s biggest-ever corporate fraud investigation, climbed 45pc after the government appointed a new board to decide on its future.

The three-person board, led by Deepak Parekh, chairman of the Housing Development Finance bank, will look at options including a break-up of Satyam, to give staff and clients some certainty over the future of the company. They will then begin restating the company’s earnings, which chairman Ramalinga Raju admitted last week had been falsified for years.

The new board will also look at how much cash Satyam has to pay wages and complete contracts.

Satyam’s shares were hammered by the revelations, and the value of the company dropped to $330m (£218.9m) at the end of last week from more than $7bn six months ago.

Police in India also said over the weekend they had detained the chief financial officer of Satyam as part of the alleged $1bn fraud investigation.   - read more about satyam scandal

MUMBAI: The Bombay Stock Exchange benchmark Sensex tumbled nearly 300 points on Monday, the third time in a row, on aggressive selling by funds,
weak opening in European stock markets , and the World Bank debarring more software companies, including Wipro, till 2011.

The Sensex, which had been falling in the last two trading sessions after the Satyam Computer fraud came to light, fell further by 296.42 points at 9,110.05. It touched the day’s low of 9,024.45 and a high of 9,331.13 points.

The 50-share National Stock Exchange index Nifty fell 99.90 points at 2,773.10, after touching a low of 2,748.55.

Wipro, the third software producer and a component of the key index, fell 12 per cent soon after the World Bank barred the company from direct contracts until 2011, citing a conflict of interest. The stock ended with a fall of Rs 23.30 at Rs 227.35.

The government’s moves to put the beleaguered software firm back on track failed to lift the broader markets, as negative global cues weighed on the investor sentiments.

The government’s moves to put the beleaguered software firm back on track failed to lift the broader markets, as negative global cues weighed on the markets. Asian stock markets
retreated on Monday as a jump in US unemployment intensified concerns the global economy is facing a prolonged slump.

The Sensex is down 135 points to 9,271 while Nifty has shed 50 points to 2,822 level.

“Markets still remain in a bearish trend,” said Ajay Bagga, chairman of Financial Planning Standards Board of India. On Satyam, he said that the IT company’s brand image has been tarnished and the extent of liabilities needs to be figured out. However, the stock has rallied over 50 per cent after the government appointed three members to Satyam Computer’s board.

In a setback to another IT stock, Wipro, it is down nearly 4 per cent after Wipro disclosed that it can’t contest World Bank contracts for 2007-11.

Source  /courtesy: NDTV profit 

All about Satyam scandal / scam at www.ghotala.in