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The Institute of Chartered Accountants of India Established by an Act of Indian Parliament “The Chartered Accountants Act, 1949” Agenda • • • • • • • ICAI Mission About ICAI Central Council ICAI Committees Functions ICAI – Key National Body Education & Training – New Scheme of Education & Training • • • • • • • • • • Examinations Accounting Standards Auditing Standards Research & CPE Professional ethics Professional Development Peer Review Financial Reporting Review International Initiatives New Initiatives ICAI Mission The Indian Accountancy Profession will be the Valued Trustees of World Class Financial Competencies, Good Governance and Competitiveness The Institute • Established by the Chartered Accountants Act 1949 • To regulate the profession of Accountancy • Education & Examination of Accountancy • Ensuring Standards of performance of Members – – – – – – – Formulation of Accounting Standards Prescription of Auditing & Assurance Standards Laying down Ethical Standards Continuing Professional Education Financial Report Review Monitoring quality through Peer Review Conducting Post Qualification Courses • Exercise Disciplinary Jurisdiction • Input on Policy matters to Government, Regulators etc. ICAI Profile Particulars No. INTERNATIONAL PRESENCE ORGANIZATIONAL Regional Offices Branches Chapters Abroad 5 108 15 SPECIAL PURPOSE OUTFITS CPE Study Circle 174 CPE Chapters 48 Reference Libraries 20 Accredited Institutions MEMBERSHIP (‘000) % in Practice STUDENTS (‘000) Founder Member of IFAC, IASB, CAPA, SAFA, IIN Indian Accountants Benchmarked Internationally 5% of Members settled in more than 50 big cities around the World 273 130 60% 300 Dominant presence in UAE, USA, UK etc. ICAI Spread Chapters Abroad New Delhi Kanpur Calcutta Mumbai Chennai Office in Dubai • • • • • • • • • • • • • • • Abu Dhabi Bahrain Doha Dubai Saudi Arabia (Eastern province) Jeddah Nairobi (Kenya) Riyadh Zambia Botswana London Indonesia Kuwait Nigeria Port Moresby (Papua New Guinea) Council Committees Standing Non-Standing The Central Council • Consisting of 30 Members – 24 Elected Members – 6 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 Standing Committees Examination Committee Executive Committee Disciplinary Committee Imp. Non-Standing Committees Accounting Standards Board Accounting & Assurance Standards Board Expert Advisory Committee Research Committee Corporate & Allied Laws Committee Information Technology Committee Committee on Ethical Standards Comm. On Fin. Markets & Investors’ Protection Committee on Insurance & Pension Board of Studies Committee on Trade Laws & WTO Fiscal Laws Committee Standards Interpretations Committee Imp. Non-Standing Committees - 2 Professional Development Committee Continuing Professional Education Committee Peer Review Board Financial Reporting Review Board International Affairs Committee Audit Committee Committee on Members in Industry The Institute is responsive to the emerging challenges and constitutes new committees for effectively meeting these challenges Research Unit: ICAI-Accounting Research Foundation Organisation Structure . PRESIDENT VICE-PRESIDENT SECRETARY TO THE COUNCIL (Secretary to the Institute) DEPARTMENTS COMMITTEES Administration Examination Disciplinary M&SS A/C. & Finance HRD, P & A Council International Affairs Technical Directorate Board of Studies CPE Directorate Institute Functions Professional Development Regulatory Advisory 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 Examples of Involvement of ICAI in National Organisations • • • • • • • • • • 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 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 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 Highlight 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 Examination • One of the largest Accounting examination networks • 120,000 students appear in the examinations • Administrative conduct of examination and exam related process largely computerised • Exams are held twice in a year • Examination system considered to be of high standard & integrity worldwide • Has been lending expertise to accounting bodies in other countries Accounting Standards • Formulation through wider participation and consultation • Harmonisation with International Standards Accounting Standards In effective use IAS Indian AS 38 28 Under preparation 7 Irrelevant to India 2 Guidance Note issued 1 Total 38 38 • Mechanism for issuance of interpretations • Ensuring effective implementation through comprehensive framework Auditing Standards • For ensuring quality in audit process • Formulation through wider participation and consultation • Harmonization with International Standards Auditing Standards AAS Issued so far ISAs Indian AAS 38 33 Irrelevant to India 2 ISA yet to be considered 2 Total 38 38 • 40 Guidance Notes on other issues • Constant dialogue with authorities like C&AG, RBI • ICAI is consulted by IAASB on standard setting 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 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 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 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 Financial Reporting Review • Financial Reporting Review Board constituted in 2002 to review general purpose financial statements of certain enterprises • Board’s 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 International Initiatives • Extended support to ICAN and ICASL in terms of focussed MOUs • Joint conferences organised with IFAC, ICAEW, ICAP, ICASL, ICAN • SAFA adopted ICAI curriculum as model • ISA program launched in Sri Lanka • Student exchange programs held with ICAB, ICAP, ICAN and ICASL • MOU with UAE for development of Accounting Profession • MOU likely to be signed in near future with Sultanate of Oman International Initiatives • ICAI being consulted by IAASB in Audit Standards Setting • ICAI represented in – IFAC – Board Member, Education Standards Board, SMP Committee, Developing Nations Committee, International Public Sector Accounting Standards Board, Professional Accountants in Business Committee – CAPA – Dy. President, Chairman, Strategic Committee – SAFA - President, Permanent Secretary, Chairmen of various Committees and Working Groups • Playing a lead role in the area of Developing Nations, SMPs and SMEs 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 • Amendments proposed in Act • Recast professional curriculum • Bridging the expectation gap 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 ICAI - Virtual Institute - 2 • 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 Institute’s services taking into consideration security requirements.