The Institute of Chartered Accountants of India

The Institute of Chartered Accountants of India

File:ICAI Logo.jpg
ICAI Data
Status	Statutory Body Corporate responsible to regulate the Auditing and Accountancy profession in India
President	CA. Amarjit Chopra
Vice President	CA.G. Ramaswamy
Membership	154,933
Students	518,798
Member's Designations	ACA & FCA
Website	www.icai.org

The Institute of Chartered Accountants of India (ICAI) is a statutory body established under the Chartered Accountants Act, 1949 (Act No. XXXVIII of 1949) for the regulation of the profession of Chartered Accountancy in India. During its more than sixty years of existence, the Institute has achieved recognition as a premier accounting body in India for its contribution in the fields of education, professional development, maintenance of high accounting, auditing and ethical standards. The ICAI now is the second largest accounting body in the whole world . After the passing of the Chartered Accountants Act on 1 May 1949, the term Chartered Accountant came to be used in place of Registered Accountants. Unlike the UK or Australia, the term "Chartered" does not relate to a Royal Charter as there is no royal charter in the Republic of India.

Organisational Setup

The affairs of ICAI are managed by the Council as per the Chartered Accountants Act, 1949 and the Chartered Accountant Regulations, 1988. The council consists of 32 elected members and 8 nominated members. The Government of India nominates 8 members to represent the comptroller and Auditor General of India, the Ministry of Corporate Affairs, Ministry of Finance and other stakeholders. The President of the Institute is elected the Council members among themselves for a period of one year. As a matter of convention, the Vice-President is elevated as the President the very next year. In terms of the Chartered Accountants Act, 1949 the President is the Executive Authority of the council.

Functions

The Main Functions of ICAI are prescribing qualifications for Membership, holding examinations, arranging practical training for candidates, enrollment of members, publication and maintenance of register of qualified Members, carrying on activities for development of profession and maintenance of status and standard in the profession. The ICAI conducts research and brings out handbooks and publications/monologues in the direct interest of the members.It explores the opportunities for the employment of its members. In addition it issues Certificate of Practice to members in practice and exercises disciplinary jurisdiction as a quasi-judicial authority over the CA Profession. Besides regulating the profession, the ICAI is also the National standard setting authority in India. The Accounting Standards Issued by ICAI have been given statutory recognition under various statues. ICAI also issues Standards on Auditing and Guidance Notes for the benefit of its members.

Accountancy
Key concepts
Accountant · Bookkeeping · Trial balance · General ledger · Debits and credits · Cost of goods sold · Double-entry system · Standard practices · Cash and accrual basis · GAAP / IFRS
Financial statements
Balance sheet · Income statement · Cash flow statement · Equity · Retained earnings
Auditing
Financial audit · GAAS · Internal audit · Sarbanes–Oxley Act · Tax Audit
Fields of accounting
Cost · Financial · Forensic · Fund · Management · Tax

Role of ICAI

1. To regulate the profession of Accountancy
2. Education & Examination of Chartered Accountancy
3. Exercise Disciplinary Jurisdiction
4. Input on Policy matters to Government
5. Ensuring Standards of performance of Members
6. Formulation of Accounting Standards
7. Prescription of Engagement and Quality Control Standards
8. Laying down Ethical Standards
9. Continuing Professional Education
10. Financial Report Review
11. Monitoring Quality through Peer Review
12. Conducting Post Qualification Courses

ICAI offers inputs to

1. Comptroller & Auditor General of India
2. Ministry of Company Affairs, Govt. of India
3. Reserve Bank of India
4. Securities and Exchange Board of India
5. Central Board of Direct Taxes
6. Insurance Regulatory and Development Authority
7. Departments of Central and State Governments
8. Departments of Public Enterprises

Chartered Accountancy as a Profession

Chartered Accountancy is a challenging profession that offers practice or job opportunities in the areas of accounting, auditing, corporate finance, project evaluation, company and other business laws, taxation and corporate governance. The multi-faceted knowledge a chartered accountant enjoys through unique academic programme blended with practical training is what the business and industry need in the advent of liberalisation, privatization and globalisation of Indian economy. Chartered Accountants are better equipped to discharge accounting and audit functions in a computerized business environment.

Role played by a Chartered Accountant

File:CA logo icai.jpg

New Logo unveiled by ICAI for use by its members in their letterheads and official documents. Members of ICAI can use only this logo and cannot use the symbol of ICAI

• Chartered Accountants enjoy a career in the specialized areas of Accounting, Auditing, Corporate Finance, Corporate Law and Taxation.

• Chartered Accountants are highly demanded professionals in industry.

• Chartered Accountants are statutorily recognized audit practitioners.

• Chartered Accountants are highly demanded and sought-after professionals in the practice of Income-tax, Service-tax and other indirect tax areas.

• Chartered Accountants are technically equipped to act as management consultants.

• Chartered Accountants possess adequate knowledge in systems and information technology, which help to excel in the areas such as development of advanced IT systems for the organisations including for the functions of finance and accounting.

Independent Professional Practices

As practitioners of public accounting, CAs may start Professional practice as a proprietor or join any existing firm as a partner or staff member. A CA provides compliance and review services. A CA also acts as a business advisor by providing all kinds of services including the preparation of financial reports, helping the business to secure loans, preparing financial projections and determining the viability of business. As a tax advisor, a CA helps businesses and individuals to comply with tax laws.

Management Consultancy Services

CAs play a vital role in assisting business and industry to improve the use of their resources, increase their efficiency and achieve their objectives. The breadth of management advisory services rendered by CAs reflect their expertise in diverse areas. Such services include financial management, planning and financial policy determination such as

• Preparation of project reports and feasibility studies
• Market research and demand studies
• Budgeting, inventory management, working capital management
• Business policy, corporate planning, organization development, growth and diversification
• Organisation structure and behaviour, development of human resources
• Systems analysis and design, and computer related services
• Advisor or consultant to capital issue
• Investment counselling in respect of securities
• Corporate Governance
• Management Accounting services
• Advisory services to the government
• Tax consultancy, filing of income tax returns etc

Statutory Monopoly

Chartered Accountants enjoy Statutory Monopoly in the following fields of service. These services can be rendered only by Chartered Accountants holding Certificate of Practice Issued by ICAI.

1. Tax Audit under the Income Tax Act, 1961
2. Statutory Audit under the Companies Act, 1956 and Limited Liability Partnership Act, 2008
3. Audit of co-operative societies and other associations under various State Legislations.
4. Value Added Tax Audit in various states.
5. Audit of Banks
6. Audit of Mutual Funds

Training

Training provided by ICAI can be classified as under:

1. Chartered Accountancy Course or Membership Course
2. Courses for Qualified Members

Chartered Accountancy Course or Membership Course

Chartered Accountancy Course is considered as one of the toughest course, with a very small pass percentage. As per the new scheme of education , the training courses accordingly the following three levels of exams have been prescribed for gaining membership to the Institute of Chartered Accountants of India:

1. CPT (Common Proficiency Test)(Two Sessions of two subjects each)
2. IPCC (Integrated Professional Competence Course) (Two groups of four and three papers respectively)/
3. Final Exam (Two groups of four papers each)

The Syllabus new CA Final course is as follows:

Group I

1. Paper 1: Financial Reporting (100 Marks)
2. Paper 2: Strategic Financial Management (100 Marks)
3. Paper 3: Advanced Auditing and Professional Ethics (100 Marks)
4. Paper 4: Corporate and Allied Laws (100 Marks)-Section A: Company Law (70 Marks)-Section B: Allied Laws (30 Marks)

Group II

1. Paper 5:Advanced Management Accounting (100 Marks)
2. Paper 6: Information Systems Control and Audit (100 Marks)
3. Paper 7: Direct Tax Laws (100 Marks)
4. Paper 8: Indirect Tax Laws (100 Marks)-Section A: Central Excise (40 Marks)-Section B: Service Tax & VAT (40 Marks)-Section C: Customs (20 Marks)

To be become a member, students must pass the above exams and complete 3 years(3.5 years in case of PCC scheme which was their before IPCC was introduced) of Articled Training under the guidance of a practicing Chartered Accountant. Students are also allowed to undergo industrial training for a maximum period of 1 year. The Institute conducts CPTs all round the year, while IPCC and Final examinations are conducted in May and November each year at exam centers in major cities/regions in India and also abroad namely Abu Dhabi (U.A.E) , Dubai (U.A.E), Kathmandu (Nepal) etc . Its being criticized that ICAI is making more students pass CPT and students are not able to pass next level. ICAI is earning a lot from this in the form of examination fees etc.

The Institute has also introduced Accounting Technician Certification with the introduction of Integrated Professional Competence Course. Any person who passes Group-I of IPCC and completes one year practical training under a practicing or non-practicing member can apply for Accounting Technician Certification and designate himself as a Accounting Technician. Its interesting to see that Chartered Accountants teaching Chartered Accountancy students between 9.30 AM and 5.30 PM amounts to professional misconduct and proceedings in accordance with Section 21 read with 22 will be initiated against such members.

New Initiatives- Education & Training

1. Launch of new course for Accounting Technicians & IPCC
2. Introduction of concept E-Learning
3. Launch of Virtual Institute Project providing e-services to members and students
4. Recast of professional curriculum
5. Lectures through Gyan Darshan Channel for CPT & PCC Students
6. Three Months Residential Course for improving General Management & Communication Skills
7. Establishment of more than 100 computer labs to impart ITT Training all over India
8. Grant of status of approved research supervisors by the Guru Govind Singh Indraprastha University
9. Establishment of CA Student Benevolent Fund
10. Setting of Centre of Excellence for CA Students
11. MOU with Bharathiar University & Guru Jambheshwar University Of Science And Technology (GJUS&T)

Courses for Qualified Members of ICAI

Some of the courses offered by ICAI to its qualified members are as follows:

Certificate Courses for Member -

1. Certificate Course on Enterprise Risk Management
2. Certificate Course on Master in Business Finance
3. Certificate Course on Corporate Governance
4. Certificate Course on [International Taxation]
5. Certificate Course on Forensic Accounting & Fraud Detection using IT & CAATs
6. Certificate Course on International Financial Reporting Standards
7. Certificate Course on Forex and Treasury Management
8. Certificate Course on Derivatives
9. Certificate Course on Valuation
10. Certificate Course on Arbitration

Post Qualification Courses -

1. Information Systems Audit (ISA)
2. CPE Course on Computer Accounting and Auditing Techniques (CAAT)
3. Diploma in Insurance and Risk Management (DIRM)
4. Management Accountancy Course (MAC)/ Corporate Management Course (CMC)/ Tax Management Course (TMC)
5. International Trade Laws & World Trade Organisation (ITL & WTO)
6. ERP Courses on SAP FA & MA Module, Microsoft Dynamics NAV

New Initiatives- Profession and Standards

1. Convergence to IFRS- By April 2011
2. Convergence to Clarity Project
3. Cap on fee for rendering services other than audit
4. Disciplinary mechanism framework
5. Focus on bridging the expectation gap

Accounting Standards Issued by ICAI

Main article: Accounting Standards Issued by ICAI

To date, the Institute of Chartered Accountants of India has issued 32 Accounting Standards. These are numbered AS-1 to AS-7 and AS-9 to AS-32 (AS-8 is no longer in force since it was merged with AS-26). Compliance with Accounting Standards issued by ICAI has become a statutory requirement with the notification of Companies (Accounting Standards) Rules, 2006 by the Government of India.

Accounting Standards Convergence with IFRS

1. 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
2. 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.
3. ICAI would also formulate its work-plan to ensure that IFRSs are effectively adopted from 1st April 2011.
4. IFRSs-specific training programs will be organized for its members and others concerned to prepare them to implement IFRSs.
5. IASB has also offered to help the ICAI in its endeavors towards Convergence with IFRSs in India
6. Recognizing the need for convergence in India, Council of ICAI decided to converge with IFRSs from accounting periods starting from 1st April 2011 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

Audit and Assurance Standards issued by ICAI

Main article: Audit and Assurance Standards issued by ICAI

ICAI has so far issued 36 Engagement and Quality Control Standards (formerly known as Auditing and Assurance Standards) covering various topics relating to Auditing and other engagements. All Chartered Accountants are required to adhere to all these standards. If a Chartered Accountant is found not to follow the said standards he is deemed guilty of professional misconduct. ICAI has reclassified the standards into five heads in order to be compatible with International Audit and Assurance Standards.