The Institute of Chartered Accountants of India - ICAI

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					  The Institute of Chartered
    Accountants of India
          Established by an
       Act of Indian Parliament
“The Chartered Accountants Act, 1949”
Our Mission

  The Indian Accountancy Profession will be
      the Valued Trustee of World Class
  Financial competencies,Good Governance
             and Competitiveness
Profile of ICAI

 • Was set up in 1949 under the Chartered
   Accountants Act, 1949 even before
   adoption of Constitution of India in 1950

    Since then Profession has grown leaps
   and bounds in terms of Membership and
                Student base
Profession in India
• 145K Members spread throughout the country and in
  different parts of the world
• Sizeable studentship base
• Increase in percentage of members joining industry
• Chartered Accountants are rendering services in every walk
  of economic life - Politics, Judiciary, Government,
  Agriculture, Corporate, NGOs
• Profession is dominated by small firms
• Increasing trends towards consolidation
• Government of India looks at ICAI as Partner in Nation
• Technical Standards based on International Standards
• Focus on Capacity Building in the emerging context
Size of Firms
•   Vast majority SMPs with SME clients
•   Cost and time vis-a-vis detailed requirements of Standards
•   We do not believe in separate auditing Standards for audit of SMEs
•   alternative between “audit” and “review” likely to create confusion,
    not much value addition seen w.r.t clients as well as costs and
    risks involved vis-a-vis remuneration

                          Size of Indian Accountancy Firms

                                                             sole proprietor
                                                             2-5 partners
                                                             6-10 partners
     12635                                                   11-15 partners
                                                             16-20 partners

ICAI Profile
Particulars                 No.


  Regional Offices           5

  Branches                  117

  Chapters Abroad           20


  CPE Study Circle          131

  CPE Chapters              43

  Reference Libraries       33

  Accredited Institutions   273

MEMBERSHIP (‘000)           145

  % in Practice             53%

STUDENTS (‘000)             520
Role of ICAI
•   To regulate the profession of Accountancy
•   Education & Examination of Chartered Accountancy
•   Exercise Disciplinary Jurisdiction
•   Input on Policy matters to Government
•   Ensuring Standards of performance of Members
•   Formulation of Accounting Standards
•   Prescription of Engagement and Quality Control Standards
•   Laying down Ethical Standards
•   Continuing Professional Education
•   Financial Report Review
•   Monitoring Quality through Peer Review
•   Conducting Post Qualification Courses
ICAI Network
                                     Chapters Abroad
                                     • Abu Dhabi
                                     • Bahrain
                                     • Botswana
                                     • Doha
                                     • Dubai
        New Delhi
                                     • Indonesia
                                     • Jeddah
                 Kanpur              • Kuwait
                                     • London
                                     • Melbourne
                                     • Nairobi (Kenya)
                                     • New York

                                     • Nigeria
                                     • Port Moresby (Papua New Guinea)
                                     • Riyadh
                                     • Saudi Arabia (Eastern province)
                                     • Sydney
                                     • Toronto
  Decentralized Offices              • Zambia


Standing        Non-Standing
The Central Council
• Consisting of 40 Members

   – 32 Elected Members

   – 8 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

      Executive                  Finance
      Committee                 Committee

 Key Non-Standing Committees

              Auditing &                    Committee on    Committee on
Accounting                    Committee
              Assurance                      Accounting     Economic and
Standards                    on Insurance
              Standards                     Standards for    Commercial
  Board                       & Pension
                Board                       Local Bodies        Laws

  Expert                                                    Corporate &
               Research        Board of       Editorial
 Advisory                                                   Allied Laws
              Committee        Studies         Board
Committee                                                   Committee

              Committee                                      Comm. On
Information                   Committee     Committee
               on Trade                                     Fin. Markets
Technology                   on Corporate   on Ethical
                Laws                                        & Investors’
 Committee                   Governance     Standards
                & WTO                                        Protection

                             Professional                   International
Direct Tax    Indirect tax                  Professional
                             Development                       Affairs
Committee     Committee                      Education
                              Committee                      Committee
Key Non-Standing Committees - 2

   Financial                                         Capacity     Perspective
                       Board of     Peer Review                    Planning
  Reporting                                          Building
                      Discipline      Board                       Committee
 Review Board                                       Committee

 Committee on                                                     ICAI-ICWAI-
                       Audit       Committee on       Vision
  Members in                                                          ICSI
                     Committee     Internal Audit   Committee
   Industry                                                       Committee

  Government         Management                      Diamond
                                   Public Finance
  Accounting          Accounting                      Jubilee
  Committee           Committee                     Committee

     The Institute is responsive to the emerging challenges and constitutes
           new committees for effectively meeting these challenges

                Research Unit: ICAI-Accounting Research Foundation
Organization Structure

         PRESIDENT                               Administration

                                    Examination               Disciplinary
                                       M&SS                  A/C. & Finance

 SECRETARY TO THE COUNCIL            HRD, P & A                    Council

  (Secretary to the Institute)
                                 International Affairs

                                             Technical Directorate
                                                Board of Studies

                                                CPE Directorate
Institute Functions


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
Important Initiative Undertaken to
Align with Changing Economic Order
• Convergence with International Standards of Accounting and
• Review and Revision of Education and training curriculum
• Launch of Post Qualification Courses Capacity building of firms
• Mandatory CPE Requirement
• Peer Review Mechanism
• Financial Report Review
• Brand building – Nationally and Internationally
• Focused approach on issues relating to Corp. Governance.
• Facilitating changes in regulatory frames.
• Vigorous pursuance of Mutual Recognition Agreements.
• Arrangement with Universities for graduation qualification to
  CA students
• Facilitating accounting reforms in various areas
Examples of Involvement of ICAI in National
• 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


• 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 &
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
Highlights 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
• One of the largest Accounting examination networks

• Administrative conduct of examination and exam related
  process largely computerized

• Exams are held twice a year

• Examination system considered to be of high standard &
  integrity worldwide

• Has been lending expertise to accounting bodies in other
Accounting Standards Convergence with
 • 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

 • 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.

 • ICAI would also formulate its work-plan to ensure that IFRSs are
   effectively adopted from 1st April 2011.

 • IFRSs-specific training programs will be organized for its members
   and others concerned to prepare them to implement IFRSs.

 • IASB has also offered to help the ICAI in its endeavors towards
   Convergence with IFRSs in India
Convergence with IFRSs in India

• Recognizing the need for convergence in India, Council of
  ICAI decided to converge with IFRSs from accounting
  periods starting from 1st April 2011 for:

   – 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
Strategy for Implementing Convergence
with IFRSs in India

 For Implementing Convergence with IFRSs from 1st April 2011,
 ICAI has identified following issues to be resolved:

 •   Cooperation from Legal and Regulatory Authorities

 •   Level of preparedness of Industry

 •   Education and Training of auditors and prepares of Financial

 •   Work Plan of ASB for smooth transition to IFRSs

 •   Conceptual Issues with IFRSs
Constitution of the Group on
Implementation of Convergence

 For resolving various issues, ASB of ICAI has Constituted Group on
 Implementation of Convergence with IFRSs, which constituted
 following subgroups:

 •   Sub-Group for preparing the Work Plan of ASB and liaising with the IASB

 •   Sub-Group for approaching the Government and Regulatory Authorities

 •   Sub-Group for liaising with the Industry Associations

 •   Sub-Group on Education and Training on IFRSs
Engagement & Quality Control
                On the Road to Convergence

• AASB founder member of IFAC

• Auditing standards based to the extent possible on
  corresponding    International      Standards (IS) of
  International Auditing and Assurance Standards Board
  (IAASB) - 35 Auditing Standards till 2006

• Chalked out timeline for bridging gap in convergence with
  IS under IAASB Clarity Project

• Hopes to achieve full convergence by December 2010.
Engagement & Quality Control
• AASB’s response to IAASB Clarity Project (2006 till
   – Revised & more rigorous Due Process
   – Revised Framework & Preface
   – AASs renamed & renumbered in line with IAASB terminology –
      • Standards on Auditing
      • Standards on Review Engagements
      • Standards on Assurance Engagements
      • Standards on Related Services

   – Mother Standard on Quality Control
   – Revised/ new Standards on Fraud, Audit Planning & Risk-based
   – Many new/ revised Standards in pipeline
Engagement & Quality Control
• 32 Guidance Notes on Auditing issues
• 04 Industry specific Guidance Notes:
      * Banking               * General Insurance
      * Stockbrokers          * Life Insurance
• Milestones
   – AAS 12, Responsibility of Joint Auditors
   – Statement on the Companies (Auditor’s Report) Order, 2003
   – Study on Money Laundering
   – Implementation Guide to Quality Control Standard
   – Guide to Audit of SMEs
   – Backgrounder on Auditing Standards
   – Implementation Guide on Risk-based Audit (in the pipeline)
   – Study on Basel II
   – Technical Guide on E-commerce – Implications for Auditors
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
  Professional Ethics
  • Cardinal Principles
      – Service before self
      – Extends beyond the legal requirements
  • Some major highlights

• Prohibition on other occupations       • Limit on fees for non-audit
• Prohibition on solicitation              assignments
• Prohibition on advertisement and       • Prohibition on writing Books of
  Canvassing                               Accounts of Auditee company
• Prohibition on financial interest in   • Demarcation between External
  auditee company                          and Internal Auditors
• Restriction on number of audits        • 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

• Considered as critical in the changed Scenario
 Quality Control Initiative – Peer Review

• Peer Review Board of established in March 2002
• Focus on:
   – Technical Standards compliance
   – Quality of Reporting
   – Office Systems and Procedures (attestation services only)
   – Staff training Programmes (attestation services only)
• 3378 Strong panel of Reviewers maintained
• 2430 Reviewers have undergone training
• 1231 Practice units have been issue Peer Review Certificates
• The Council of the Institute accepted the request of SEBI that
  audit of listed companies shall be carried out by the auditors who
  have undergone Peer Review Process
 Quality Review Board

• Central Government has constituted Quality Review Board
  consisting of 11 persons.

• Council of ICAI has nominated 5 members on QRB

• Chairman and other 5 members have been appointed by
  Central Government

• All services provided by members (Both attestation and non
  attestation will be subject to Quality Review)

• Disciplinary action if there is a deficiency in service
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

• 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
      Code of Ethics

                    PARTICULARS                  ICAI CODE                            IFAC CODE

(a)     Approach                  Rule based.                                Principle based

(b)     Framework                 Based on legal framework as per CA Act,    Conceptual framework based
                                  1949.                                      on general principles.

(c)     Authority                 Authority founded in specific Statute.     It suggests basic principles in
                                                                             modular form along with
                                                                             examples without any
                                                                             statutory authority.

(d )    Enforceability            Inbuilt mechanism for its enforcement is   Professional Accountants to
                                  in place.                                  see enforceability themselves.
New Initiatives- Education & Training

• Launch of new course for Accounting Technicians
• Introduction of concept E-Learning
• Launch of Virtual Institute Project providing e-services to members
  and students
• Recast of professional curriculum
• Lectures through Gyan Darshan Channel for CPT & PCC Students
• Three Months Residential Course for improving General
  Management & Communication Skills
• Establishment of more than 100 computer labs to impart ITT
  Training all over India
• Grant of status of approved research supervisors by the Guru
  Govind Singh Indraprastha University
• Establishment of CA Student Benevolent Fund
• Setting of Centre of Excellence for CA Students
New Initiatives- Profession and
• Convergence to IFRS- By April 2011

• Convergence to Clarity Project

• Cap on fee for rendering services other than audit

• Disciplinary mechanism framework

• Focus on bridging the expectation gap
International Presence
• ICAI is founder member of IFAC, CAPA, SAFA and IIN

• ICAI represented in :
   – IFAC - Board, Education Standards Board, SMP Committee,
     Developing Nations Committee, International Public Sector
     Accounting Standards Board, Professional Accountants in
     Business Committee

   – CAPA – President & Board member

   – ICAI holds Permanent Secretariat, SAFA

   – SAFA - Chairmen and member of various Committees and
     Working Groups
International Initiatives
• Opening up of new Chapters abroad- Oman and New York.
  Singapore Chapter on anvil.

• MOU with College of Banking and Financial Studies, Oman –
  For institutionalization of accounting profession in Oman.

• MOU with Center of Excellence for Applied Research and
  Training (CERT), Dubai- To conceptualize and devise an
  international curriculum in accountancy integrating local
  needs keeping in mind various requirements of different
  levels of accountancy and audit professionals.

• Technical assistance programme to CPA Mongolia and
  University of Djibouti ongoing.

• Implementation of Guidelines for Article Training Abroad.
International Initiatives Contd.
• ICAI being consulted by IAASB in Audit Standards Setting and by
  IASB in IFRS setting
• Playing a lead role in the area of Developing Nations, SMPs and
  SMEs, International Public Sector Accounting Standards,
  International Education Standards
• SAFA adopted ICAI curriculum as model
• Student exchange programs held with ICAB, ICAP, ICAN and
• Opened an Office in Dubai
• Initiatives for recognition of ICAI qualification by accounting
  bodies in other countries
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
• 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.
The Institute of Chartered Accountants of India
                 [Set up by an Act of Parliament]
      “ICAI Bhawan”, Indraprastha Marg, New Delhi – 110 002.
                Phone: 91-11-39893989, 30110210

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