Concurrent Audit of Banks Limit Set to 4 per Member: ICAI

It is our endeav­our to strength­en poli­cies and pro­ce­dures that enable mem­bers to ren­der qual­i­ty ser­vices. In a sep­a­rate man­ner, the Coun­cil decid­ed to fix lim­it on con­cur­rent audit of banks at 4 audits per mem­ber per year.  Coop­er­a­tive banks and RRBs were exempt­ed from the lim­it.  The above lim­it will come into effect from 1.1.2016. These lim­its are care­ful­ly kept to enable mem­bers to devote more time there­by improv­ing the qual­i­ty of work.

Dear Pro­fes­sion­al Colleagues,

I am hap­py to share with you some sig­nif­i­cant devel­op­ments con­cern­ing pro­fes­sion and impor­tant deci­sions tak­en by the Coun­cil at its 342^nd meet­ing held on 15^th, 16^th April 2015 and on 4^th and 5^th May 2015 after adjournment.

Meet­ing with Shri Arun Jait­ley, Hon’ble Min­is­ter of Finance.

A meet­ing was called by Min­istry of Finance on 24th April, 2015 to dis­cuss new ITR forms. It was chaired by Shri Arun Jait­ley Hon’ble Min­is­ter of Finance. We shared our con­cerns and the chal­lenges in the new forms with the Min­is­ter. We have also empha­sized the need for a sim­pli­fied sin­gle page return form which was appre­ci­at­ed by him.

Meet­ing with RBI Governor

I am hap­py to share with you that we met Dr. Raghu­ram Rajan, Gov­er­nor RBI in his office in Mum­bai on 28th April, 2015 to dis­cuss in detail some of the impor­tant issues con­cern­ing our pro­fes­sion. Fol­low­ing points were broad­ly discussed:

• Issues involved in the new sys­tem of Appoint­ment of Statu­to­ry Cen­tral Audi­tors (SCAs) of Pub­lic Sec­tor Banks.
• Appoint­ment of Statu­to­ry Branch Audi­tors (SBAs) of Pub­lic Sec­tor Banks.
• Increase in the Audit Cov­er­age of Branch­es of Pub­lic Sec­tor Banks under Statu­to­ry Audit.
• Inter­nal Audit relat­ed work of Banks to be out­sourced to Char­tered Accountants.

Nation­al Finan­cial Report­ing Author­i­ty (NFRA)

The Par­lia­men­tary Stand­ing Com­mit­tee on Finance (2014–15) stat­ed in its 13^th report that it would like the NFRA to func­tion as an over­sight body with­out any juris­dic­tion­al con­flict or over­lap.  It has desired that this aspect may be addressed, when the rules gov­ern­ing NFRA are final­ized by the Min­istry. The report is host­ed on the web­site at:http://164.100.47.134/lsscommittee/Finance/16_Finance_13.pdf. We had brought to the notice of the mem­bers of the Stand­ing Com­mit­tee that instead of con­sti­tu­tion of NFRA it would be a bet­ter propo­si­tion to fur­ther empow­er ICAI. I am thank­ful to the Hon’ble Chair­man and the mem­bers of the Stand­ing Com­mit­tee for con­sid­er­ing our representation.

New Stan­dards and Guid­ance Notes

The recent years have wit­nessed rapid changes in the busi­ness and eco­nom­ic envi­ron­ment. The eco­nom­ic upheavals, rise in cross bor­der move­ment of busi­ness and increased expec­ta­tions of stake­hold­ers have neces­si­tat­ed changes in the exist­ing or bring out new stan­dards and guid­ance notes. The coun­cil has approved a num­ber of drafts as a step to firm up exist­ing framework.

• Account­ing Stan­dard for Local Bod­ies (ASLB) 31, ‘Intan­gi­ble Assets’ based on cor­re­spond­ing IPSAS 31.
• Account­ing Stan­dard for Local Bod­ies (ASLB) on ‘Finan­cial Report­ing under the Cash Basis of Account­ing’ cor­re­spond­ing to IPSAS on ‘Finan­cial Report­ing under the Cash Basis of Accounting’.
• Account­ing Stan­dard for Local Bod­ies (ASLB) 3, ‘Account­ing Poli­cies, Changes in Account­ing Esti­mates and Errors’ cor­re­spond­ing to IPSAS 3 on ‘Account­ing Poli­cies, Changes in Account­ing Esti­mates and Errors’.
• Account­ing Stan­dard for Local Bod­ies (ASLB) 19, ‘Pro­vi­sions, Con­tin­gent Lia­bil­i­ties and Con­tin­gent Assets’ cor­re­spond­ing to IPSAS 19, ‘Pro­vi­sions, Con­tin­gent Lia­bil­i­ties and Con­tin­gent Assets’.
• Guid­ance Note on Account­ing for Deriv­a­tive Con­tracts to be effec­tive from 1.4.2016.  It was decid­ed that mem­bers will be encour­aged to fol­low from even ear­li­er period.
• Guide­lines for Val­u­a­tion norms for Intan­gi­ble Assets under Rule 23 of the LLP Rules, 2009.
• Guid­ance Note on Report­ing Under Sec­tion 143(3)(f) and (h) of the Com­pa­nies Act, 2013.
• Illus­tra­tive for­mats of the audi­tor’s report on con­sol­i­dat­ed finan­cial state­ments of a com­pa­ny under the Com­pa­nies Act 2013.

Elec­tion reforms

To ensure fair and trans­par­ent elec­tions to the cen­tral and region­al coun­cils an Elec­toral Reforms Group was formed. The Coun­cil con­sid­ered its Report and decid­ed that:

1. Set up of polling booth in chap­ters abroad hav­ing more than 500 vot­ers, sub­ject to fea­si­bil­i­ty and per­mis­sion to be obtained from MCA and MEA/MHA.
2. Bal­lot papers will include mem­ber­ship no. of can­di­date along with photograph.
3. Polling Offi­cers will be giv­en clear instruc­tions as to which doc­u­ments to be ver­i­fied for iden­ti­fi­ca­tion of voter.
4. Efforts will be made for dis­play cast of votes through web­site every two hours.
5. Host draft list of vot­ers and seek vot­ers to point out errors, if any.
6. Pos­si­bil­i­ty of get­ting con­fir­ma­tion from postal vot­ers that they have post­ed their vote shall also be explored.

Qual­i­ty Review Board References

Under the Char­tered Accoun­tants Act, 1949, con­se­quent to the Char­tered Accoun­tants (Amend­ment) Act, 2006, the Cen­tral Gov­ern­ment has con­sti­tut­ed a Qual­i­ty Review Board. In the recent meet­ing the coun­cil dis­posed off 10 ref­er­ences received from the Qual­i­ty Review Board con­tain­ing rec­om­men­da­tions to the Coun­cil under clause (a) of Sec­tion 28B of the Char­tered Accoun­tants Act, 1949.

Con­cur­rent Audit Limits

It is our endeav­our to strength­en poli­cies and pro­ce­dures that enable mem­bers to ren­der qual­i­ty ser­vices. In a sep­a­rate man­ner, the Coun­cil decid­ed to fix lim­it on con­cur­rent audit of banks at 4 audits per mem­ber per year.  Coop­er­a­tive banks and RRBs were exempt­ed from the lim­it.  The above lim­it will come into effect from 1.1.2016. These lim­its are care­ful­ly kept to enable mem­bers to devote more time there­by improv­ing the qual­i­ty of work.

Glob­al Exhi­bi­tion on Services

As a part­ner in Nation build­ing the ICAI through its tech­ni­cal com­mit­tee viz. the Com­mit­tee on Eco­nom­ic, Com­mer­cial Laws & WTO par­tic­i­pat­ed at the Glob­al Exhi­bi­tion on Ser­vices (GES) 2015, April 23–25, 2015 in New Del­hi. It was the unique ini­tia­tive of the Min­istry of Com­merce, Gov­ern­ment of India to pro­mote export of Ser­vices from India and to pro­vide a plat­form to enhance strate­gic coop­er­a­tion and devel­op syn­er­gies between play­ers of the ser­vices sec­tor in India with their Glob­al coun­ter­part. There was par­tic­i­pa­tion from more than 35 Coun­tries with 400 Exhibitors.

ICAI Exam­i­na­tions

The present round of ICAI exam­i­na­tions start­ed on 2nd May. It is a mam­moth task that involves close coor­di­na­tion and super­vi­sion. I am sure the stu­dents who have put in right efforts would man­age good marks. Pass­ing exam­i­na­tions is not as dif­fi­cult as per­ceived by some.

Exam­i­nees may also have diverse opin­ion on the ques­tion paper. In case you find ques­tion papers to be undu­ly lengthy or you feel that ques­tions are incor­rect or beyond syl­labus, then you must write to us at examfeedback@icai.in so as to reach us not lat­er than one week from the date of the last exam­i­na­tion, i.e. 25th May 2015. I assure that each mail would be prop­er­ly con­sid­ered so that no injus­tice is done.

Con­vo­ca­tions
At ICAI, con­vo­ca­tions are orga­nized twice each year at var­i­ous metros/cities in order to con­fer the new­ly qual­i­fied Char­tered Accoun­tants with their mem­ber­ship cer­tifi­cates. Stu­dents get their mem­ber­ship cer­tifi­cate declar­ing them as Char­tered Accoun­tants – a degree allow­ing them to either go in for prac­tice or serve the indus­try. In con­tin­u­a­tion with the prac­tice we are in the process of orga­niz­ing the first round of Con­vo­ca­tions at var­i­ous metros/cities – Ahmed­abad, Mum­bai, Chen­nai, Pune, Jaipur, Hyder­abad, Kolkata, New Del­hi and Kan­pur dur­ing the months of May to July

These are some of the recent impor­tant devel­op­ments which I want­ed to share with you. I assure you, the Coun­cil is com­mit­ted to work in the best inter­est of the profession.

With Best Wishes,

May 14, 2015
New Delhi

CA. Manoj Fadnis
President