The Institute of Chartered Accountants of India

The Institute of Chartered Accountants of India (ICAI) is a statutory body established under the Chartered Accountants Act, 1949 passed by the Parliament of India to regulate the profession of Chartered Accountancy in India. ICAI celebrated its Diamond Jubilee during the year 2009. ICAI is considered to be the second largest accounting body in the whole world in sheer terms of membership. Unlike most other Commonwealth countries, the word Chartered in Chartered Accountant does not refer to any Royal Charter since India is a republic. Chartered here represents the respected position of the members of ICAI. After the Chartered Accountants Act, 1949 was brought into force on 1st July 1949, the term Chartered Accountant came to be used in place of Registered Accountants and Government Diploma Accountants.

Motto

File:ICAI Logo.jpg

The Emblem of the Institute of Chartered Accountants of India as given by Sri Aurobindo

The Motto of ICAI is

Ya Esa Suptesu Jagarti

The motto of ICAI is a quotation from the Upanishads(Kathopanishad) and it literally means a person who is awake in those that sleep. It was given to ICAI at the time of its formation in 1949 by Sri Aurobindo as part of its emblem. :

History

The Companies Act, 1913 passed in Pre-independent India prescribed various books which had to be maintained by a Company registed under that act. It also required the appointment of a formal Auditor with prescribed qualifications to audit such records. In order to act as an auditor a person had to acquire a restricted certificate from the local government upon such conditions as may be prescribed. the holder of a restricted certificate was allowed to practice only within the province of issue and in the language specified in the restricted certificate. In 1918 a course called Government Diploma in Accountancy was launched in Bombay(now known as Mumbai). On passing this Diploma and completion of three years of Articled Training under a approved accountant, a person was held eligible for grant of an unrestricted certificate. This Certificate entitled the holder to practice as an Auditor throughout India. Later on the issue of restricted certificates was discontinued in the year 1920. In the year 1930 it was decided that the Government shall maintain a Register called the Register of Accountants. Any person whose name was entered in such register was called Registered Accountant. Later on a board called the Indian Accountancy Board was established to advice the Governor General on Accountancy and the qualifications for Auditors. However it was felt that the Accountancy profession was highly unregulated and caused lots of confusion as regards the qualifications of auditors. ]Hence in the year 1948,just after independence in 1947 an Expert Committee recommended that a separate autonomous association of accountants should be formed to regulate the profession. The government took it seriously and passed the Chartered Accountants Act in 1949 even before India became a Republic. Under Section 3 of the said Act, ICAI is established a body corporate with perpetual succession and a Common Seal.

The Christening of the name Chartered Accountant to the professional accountants in India has a contradiction behind it. One may be given the view that the institute is backed by a Royal Charter. But it is not so, since there cannot be a royal charter in a Republic country like India. At the time of passing the Chartered Accountants Act, various other name like Certified Public Accountant etc, used for similar professionals in other countries, were considered. But the professionals were very adamant that the professionals should be christened only as Chartered Accountants. This was because many accountant has already acquired memberships of the Institute of Chartered Accountants in England & Wales and were practicing in the name of Chartered Accountants. This had increased the respect and honour associated with designation, Chartered Accountant. Hence the professionals pressed for this name and won the same. Therefore failing the meaning associated with a Chartered Accountant, in India the name simply recognizes the respect and honour associated with the profession and not any Royal Charter.

Role played by a Chartered Accountant

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

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 and quality course availablle as on date. . As per the new scheme of education , the Chartered Accountant course is divided into three levels.Any person who wants to become a member of ICAI has to pass the following three levels of examinations and complete three and a half years of Articled Traning under a Practicing Chartered Accountant:

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)

Students are also allowed to undergo industrial training for a maximum period of 1 year in lieu of Articled Training. ICAI 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 . With the Introduction of the CPT in 2007, the CA course has become more populer among Indian students. ICAI 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. ICAI has entered into agreements with various universities like Nethaji Subash University and Bharathiar University to help the CA students acquire a undergraduate Degree easily. According any person who has passed IPCC can easily acquire a Bachelor of Commerce Degree just by writing a few papers.

Courses for Qualified Members of ICAI

Inaddition to the Chartered Accountancy Couse, ICAI also conducts various Certificate courses for its members. Some of them 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

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

ICAI has decided to converge its Accounting Standards 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 has taken up the matter of Convergence with National Advisory Comittee on Accounting Standards, and various regulators such as the RBI, SEBI and IRDA. IASB, the issuer of IFRS has also offered to help the ICAI in its endeavors towards Convergence with IFRSs in India

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.