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
• 150K 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
Building
• Technical Standards based on International Standards
• Focus on Capacity Building in the emerging context
Size of Firms
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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
27
sole proprietor
2-5 partners
6-10 partners
11-15 partners
16-20 partners
102
989
12635
31950
ICAI Profile
Particulars
No.
ORGANIZATIONAL
Regional Offices
Branches
Chapters Abroad
5
118
21
SPECIAL PURPOSE OUTFITS
CPE Study Circle
131
CPE Chapters
43
Reference Libraries
33
Accredited Institutions
MEMBERSHIP (‘000)
% in Practice
STUDENTS (‘000)
273
150
53%
520
Role of ICAI
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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
New Delhi
Kanpur
Calcutta
Mumbai
Chennai
Decentralized Offices
Chapters Abroad
• Abu Dhabi
• Bahrain
• Botswana
• Doha
• Dubai
• Indonesia
• Jeddah
• Kuwait
• London
• Melbourne
• Muscat
• Nairobi (Kenya)
• New York
• Nigeria
• Port Moresby (Papua New Guinea)
• Riyadh
• Saudi Arabia (Eastern province)
• Singapore
• Sydney
• Toronto
• Zambia
Council
Committees
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
Committee
Finance
Committee
Examination
Committee
Disciplinary
Committee
(Section 21D)
Key Non-Standing Committees
Accounting
Standards
Board
Auditing &
Assurance
Standards
Board
Committee
on Insurance
& Pension
Committee on
Accounting
Standards for
Local Bodies
Committee on
Economic and
Commercial
Laws
Expert
Advisory
Committee
Research
Committee
Board of
Studies
Editorial
Board
Corporate
Laws
Committee
Committee
on
Information
Technology
Committee
on Trade
Laws
& WTO
Committee
on Corporate
Governance
Ethical
Standards
Board
Comm. On
Fin. Markets
& Investors’
Protection
Key Non-Standing Committees - 2
Board of
Discipline
(Sec.21 A)
Peer Review
Board
Capacity
Building
Committee
Perspective
Planning
Committee
Committee for
Members in
Industry
Audit
Committee
Internal Audit
Standards
Board
Vision
Committee
ICAI-ICWAIICSI
Committee
Committee on
Government
Accounting
Management
Accounting
Committee
Public Finance
Committee
Diamond
Jubilee
Committee
Committee on
International
Taxation
Financial
Reporting
Review Board
Key Non-Standing Committees - 2
HR & Admin
Direct Tax
Committee
Representation
Committee
Indirect tax
Committee
Infrastructure
Committee
Professional
Development
Committee
Committee for
Small & Medium
Practitioners
Continuing
Professional
Education
Committee
High Powered
Committee
International
Affairs
Committee
Disciplinary
Committee
(Sec.21B)
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
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
Important Initiative Undertaken to
Align with Changing Economic Order
• Convergence with International Standards of Accounting and
Auditing
• 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
Organizations
• 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
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
Examination
• 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
countries
Accounting Standards Convergence with
IFRSs
• 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
Statements
•
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
Standards
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
Standards
• AASB’s response to IAASB Clarity Project (2006 till
date):
– Revised & more rigorous Due Process
– Revised Framework & Preface
– AASs renamed & renumbered in line with IAASB terminology –
ENGAGEMENT STANDARDS:
• 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
Audits
– Many new/ revised Standards in pipeline
Engagement & Quality Control
Standards
• 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
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
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
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
Code of Ethics
PARTICULARS
ICAI CODE
IFAC CODE
(a)
Approach
Rule based.
Principle based
(b)
Framework
Based on legal framework as per CA Act,
1949.
Conceptual framework based
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
in place.
Professional Accountants to
see enforceability themselves.
New Initiatives- Education & Training
• Launch of new course for Accounting Technicians & IPCC
• 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
• MOU with Bharathiar University & Guru Jambheshwar University Of
Science And Technology (GJUS&T)
New Initiatives- Profession and
Standards
• 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, New York &
Singapore.
• MRAs with Foreign Accountancy Bodies like ICAEW & CPA Australia.
• 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 ICASL
• 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
Website: www.icai.org