ICAI President's Communique for August 2014

Dear Professionals,

Prime Minister Shri Narendra Modi tweeted on CA Day - “I congratulate my CA friends on Chartered Accountants Day and convey my best wishes. They have a crucial role to play in India's progress”. These words of appreciation by the man at the helm of country’s affairs set the tone for this year’s CA Day celebrations on 1st July 2014. It was a historic day when our Institute completed 65 years of professional excellence and dedicated service to the nation.

“As a leader of the Indian accountancy profession, I welcome the Finance Minister’s big bang announcement regarding the implementation of Ind AS. “There is an urgent need to converge current Indian Standards with International Accounting Standards,” he said. The Finance Minister has proposed that the new Indian Accounting Standards (Ind AS) converged with IFRS shall be adopted by the Indian Companies from the financial year 2015-16 voluntarily and from the financial year 2016- 17 on a mandatory basis. The ICAI has always propagated the need to converge with IFRS at the earliest…”

CA Day Celebrations-65 Years of Professional Excellence

It was a momentous occasion of pride for us when Finance Minister Shri Arun Jaitley graced our CA Day celebrations at New Delhi. He showered words of praise on our profession and appreciated our role as a partner in nationbuilding. “If there is one profession which is an integral part of the India story and which is consistently growing along with the economy, it is the profession of Chartered Accountants.” Shri Arun Jaitley said: “My admiration for the Institute in comparison to several other professional bodies is because the ICAI makes intense and concentrated efforts to make sure that the Chartered Accountants training and education continues as an ongoing phenomenon.” The words of encouragement and recognition by the President of International Federation of Accountants Mr. Warren Allen further boosted the spirit of the CA Day celebrations. We exemplarily showcased our profession’s 65 years of excellence in the presence of a distinguished gathering of over 2000 at Vigyan Bhawan in New Delhi. I am happy to note that our members across the country joined hands to celebrate the CA Day by participating in a series of programmes and events like Tree Plantations, Distribution of Literacy Kits and Blood Donation camps. These activities demonstrated our commitment to society on this special occasion. As endorsed by our Finance Minister, our profession is an integral part of India’s success story. Over the last 65 years, our profession’s persistent pursuit of perfection, integrity, skills and knowledge has effectively fulfilled our founding fathers’ vision behind establishing the ICAI in 1949. This triumph of our profession called for a grand celebration, and the CA Day on 1st July 2014 offered us a perfect opportunity to do so. I am happy to say that the entire CA fraternity rose to the occasion with members and students across the 147 branches joining hands to rejoice and renew their resolution to provide enlightened value-added services to the society.

Cloud Campus Launched for Students

Leveraging technology to the maximum benefit of our profession is high on my agenda. We took a big leap in that direction as we launched the Cloud Campus - a new technology initiative for students, on the occasion of CA Day. The Cloud Campus is a revolutionary and futuristic next generation interactive learning management system for CA students. It is a virtual campus where e-learning courses, audio lectures, video lectures, webcasts, online mentoring, articleship training resources, etc. would be provided to the students free of cost. This initiative would herald a knowledge revolution by providing online resources to the students to prepare for the CA course. I am sure this initiative will prove to be immensely useful to our future Chartered Accountants.

Publications Online Store Takes Off

To facilitate members spread across the country to order publications online, we recently launched a Publications Online store. This new e-initiative would enable members and students to purchase all our publications online. I request you to take benefit of this capacity building initiative.

Digital Library - (24x7) Knowledge Initiative

Effective knowledge dissemination for a wellinformed profession is one of my high priorities. To facilitate a large section of our members in remote areas to access the online ICAI library, we have launched a ‘Digital Library’ on CA Day. This important technology initiative will provide access to all our e-resources (24x7) at the comfort of your home or office. The digital library provides an access to ICAI Knowledge Gateway, ICAI publications, circulars and FAQs, etc. I request you to make use of this facility in your quest for knowledge.

Union Budget 2014-15: Progressive and Growth Oriented

The Union Budget 2014-15 paves the way for a strong and vibrant economy. I am confident that this progressive and growth oriented budget would facilitate the emergence of a resurgent India. Progressive Budget: This year’s Budget is quite progressive and will spur investment-led sustainable and inclusive growth. This Budget has made commitment for the next generation of tax reforms, stability of tax regime and fiscal consolidation. The announcement regarding retrospective amendments would facilitate a healthy investment climate in India. We also welcome the advance ruling to resident tax payers with respect to income tax liability besides constitution of additional IT benches and enlarging the scope of the Settlement Commission. The Budget aims at achieving fiscal prudence and we as Chartered accountants, with multidimensional capabilities, can act as a catalyst for economic development. We can facilitate inclusive growth, good governance and reforms and can help the Government in achieving the broader objectives of the Union Budget. Ind AS Implementation: As a leader of the Indian accountancy profession, I welcome the Finance Minister’s big bang announcement regarding the implementation of Ind AS. “There is an urgent need to converge current Indian Standards with International Accounting Standards,” he said. The Finance Minister has proposed that the new Indian Accounting Standards (Ind AS) converged with IFRS shall be adopted by the Indian Companies from the financial year 2015-16 voluntarily and from the financial year 2016-17 on a mandatory basis. The ICAI has always propagated the need to converge with IFRS at the earliest, to bring the financial reporting practices of the Indian corporates at par with the global standards. This would also enable India to fulfill its G-20 commitments in this regard since globally more than 130 countries have switched over to IFRS in the preparation of financial statements. In this regard, I am delighted to state that ICAI is ready with the updated Ind AS corresponding to IFRS as of this date. We are committed to work closely with Ministry of Corporate Affairs to ensure effective and smooth implementation of Ind AS in India, which will usher in a new era of accounting reforms in the country. It’s time for us to sit up and take stock of the consequent new changes and challenges pertaining to our profession and move on with professional panache for which we are known. Let us update ourselves with the latest developments taking place in the profession and continue our journey confidently, ethically and altruistically.

Our Contribution to Union Budget 2014-15

We have also played a role in shaping this Budget through our Pre-Budget Memorandum submitted to the Government. This Memorandum comprised our suggestions based on the concerns of membership on one hand and society on the other. I am extremely happy to share with you that this year all our significant suggestions regarding Direct, Indirect and International taxes were considered and several of them were incorporated in the Finance (No.2) Bill, 2014. To take this nationally important exercise forward, we have also submitted a Post-Budget Memorandum to the Government.

Join Hands with us for the Betterment of the Indian Economy

Proactively playing our role as a partner in nation-building, we have constituted a "Study Group on Indian Economy." The Group aims to study the qualitative assessment of the macro-economic developmental indicators inter-alia pertaining to trade, globalisation, monetary management, fiscal prudence and financial reforms as a tool to development, and recommend effective measures to the Government. It will put focus on empathisation of key governmental initiatives in sustaining economic momentum and leveraging ICAI's contribution to the core work programme in the said area. The Group will also contribute in the area of Economic Advocacy to position ICAI as a valued partner to existing knowledge depository besides working for other related objectives. In this regard, I invite you to join hands with us in this important exercise, by providing your valuable inputs on the Indian economy in line with the goals of the Group.

Embracing Social Media to Empower Profession

India’s digital landscape is evolving fast. Our country has 243.2 million Internet users and 106 million active social media users, says a latest report. And a very big section of these social media users are the members of India’s emerging knowledge society, including we Chartered Accountants. These professionals are not using the social media just to connect and network, but are also using it to generate ideas, map the trends and evolve strategies for organisational and competitive advantage. I feel that we at ICAI cannot afford to lag behind in reaping the immense benefits of social media, which has a big potential to serve our professional fraternity. With this perception and vision, ICAI has recently embraced social media platforms. I am happy to inform you that at the moment, our links to Facebook, Twitter, YouTube and Google+, are available on the ICAI website for all of you. We have decided to use them to establish our credibility, trust and identity primarily by sharing our views and perspectives with our stakeholders. We may also engage some thought leaders to interact with our online community, which can emerge as an exclusive facilitating force in the coming days. Let’s use these social media platforms to unite around common passions, inspire excellence and expand our professional horizons. However, on a note of caution, I request users to follow proper netiquette while using these platforms for the good of all netizens. In this regard, you may refer to the 10 social media commandments as spelt out by the Ministry of Information & Broadcasting.

Visit of IFAC Delegation to India

In my earnest endeavour to position Indian accountancy profession on the global map, I have been taking far-reaching steps to engage leaders of the global accountancy profession. In line with that objective, we recently had wide-ranging discussions with a top-notch delegation of International Federation of Accountants (IFAC) that visited India recently. The delegation comprised IFAC President Mr. Warren Allen and Director - Quality & Member Relations Ms. Sylvia Tsen. Meetings at ICAI: I shared with them the recent initiatives of ICAI and the role played by the ICAI in enabling institutional reforms and capacity building in financial management system at all levels of governance, so as to ensure high quality of accounting and financial reporting. We also organised an interactive session of the IFAC delegation with the officials of ICAI to have a better understanding on how ICAI has been playing its role in the development of the accountancy profession in India and globally through its 23 overseas chapters. Mr. Allen also delivered a special address to our students and also addressed our members at the 65th CA Day Celebrations on the topic “Accountancy Profession: Embracing Change and Driving Growth”. Meeting with Regulators: IFAC delegation also had meetings with the Secretary, Ministry of Corporate Affairs Mr. Naved Masood, Deputy Comptroller and Auditor General of India & Chairman-Audit Board Dr. P. Mukherjee, and Controller General of Accounts (CGA) of India Mr. Jawahar Thakur. The objective of these meetings was to have a better coordination and understanding on the desired fusion of global and Indian perspectives with respect to accountancy profession. The IFAC delegation appreciated the steps being taken by the Indian regulators along with ICAI for transformation from Cash-based accounting system to Accrualbased accounting system.

Moving Ahead to Reform CA Education - A New Curriculum

Our students and CA education system is one of my topmost priorities as I believe in sustained and future-oriented growth of our profession. My vision is that accountancy profession and accountancy education need to constantly go hand in hand with academic, technological and economic advancements globally. It is with that aim that we set out for a review of the CA education and training schemes through the recently constituted CRET (Committee on Review of Education and Training). Taking this mission forward, CRET discussed the relevant issues in detail at its meetings in Mumbai, Kolkata, Delhi, Jaipur and Agra recently. In this regard, I also request you to give your feedback through an online questionnaire that has been sent to you. I am sure that this futureoriented drive of the ICAI will go a long way in benchmarking our CA education with the best in the world.

..............

Before I conclude, let us give a thought to our Independence Day (15th August) which is approaching. Let us celebrate independence with the desired sense of national pride as well as responsibility. I believe in what Mahatma Gandhi had observed once: The condition of India is unique. Its strength is immeasurable. We need not, therefore, refer to the history of other countries. I have drawn attention to the fact, that when other civilisations have succumbed, the Indian has survived many a shock. Let’s bow to our great nation and extend our enthusiasm and festive spirit to the Independence Day celebrations as well. Happy Independence Day to all of you!

Best wishes

CA. K. Raghu President, ICAI New Delhi, July 22, 2014

CMA(ICWA) newly elected President's Communique

ICSI President Message for July 2014

CS R. Sridharan
President, ICSI

“To know, is to know that you know nothing. That is the meaning of true knowledge.”
Socrates
“To know what you know and what you do not know, that is true knowledge.”
Confucius
Dear Professional Colleagues,
The wireless but integrated flat world provides opportunities and challenges for professionals never seen before. These call upon the professionals to operate in the zone of unknown unknowns and render innovative, value added, application of mind oriented solutions with promptitude and accuracy matching the expectations of clients or employers. The range of services keeps on expanding even as traditional services are being taken over by machines. As a consequence the role of professionals gets continuously redefined. The profession of company secretaries is no exception – it has metamorphosed from record keeper, compliance manager, business manager, board adviser, governance officer, strategist, solution provider, key managerial personnel, etc. He is now the key provider of business solutions on real time basis.
The Companies Act, 2013 has delineated distinct role for company secretaries either in practice or employment and confers distinction on them. They are

ICAI President's message : April 2014

Dear Professionals,

Warm greetings to all of you! You may find it interesting that when the first woman chartered accountant Ms. Ethel Watts called accountancy an eccentric choice of profession for women in 1924, it didn’t sound strange, including in India. But with Ms. Shirin K. Engineer of Mumbai and Ms. R. Shivabhogam of Chennai becoming the first and second Indian woman chartered accountant respectively in 1933 and 1947 respectively, the story changed in India.

'We Chartered Accountants, who are one of the main constituents of India’s knowledge society, are being increasingly looked upon as harbingers of such a revolution in India. As such, we are now all set to herald such a knowledge revolution in our own way, through upcoming ICAI TV channel.'

Time has come full circle since then, with more and more women joining the realm of our profession. Today, we can boast of women comprising 21.1% of our total membership as on 4th March, 2014. Complementing this figure, girls today have 36% share in our active studentship. However, I feel that the immense potential that lie embedded in these encouraging numbers is still vastly untapped and need to be harnessed, strengthened and empowered further in the interest of our profession, our society and our nation. Keeping that very objective high on my Action Plan 2014-15, I have planned many an initiative exclusively for women in accountancy through a new Women Member Empowerment Committee. Taking that mission forward, we are all set to launch an effective flexi-working portal for our women members. Further, several measures are on the cards to develop the capacity of our women to take up positions of independent directors in line with the provisions of the Companies Act, 2013. Exclusive programmes on women independent directors have also been lined up. I find women quite skilled at multitasking, and they tend to take a larger share of responsibility wherever they are, including in our profession. As such, if we empower women, we actually empower ourselves. As the leader of the Indian accountancy profession, I am particularly alive to this cause. Mahatma Gandhi had said, "You must be the change you wish to see in the world". As such, we have taken our step to stress the theme of women empowerment. Let us all join hands to strengthen our women so as to eventually strengthen the profession and the nation.

Homage to Past-President CA. P. K. Mallik

Our profession suffered an insurmountable loss when one of our leading lights, our past President (1978-79) CA. Prasantha Kumar Mallik left us for heavenly abode on 26th February 26, 2014. Also a member of the Institute of Chartered Accountants of Scotland, he was an ICAI-EIRC member from 1961 to 1967 and ICAI Central Council member from 1967 to 1979. Through his first message in this Journal in October, 1978, he had called upon the profession to strive for excellence. Let’s live up to his vision. I, on behalf of Indian accounting fraternity pay homage to him and stand by his bereaved family. May his soul rest in peace!

Putting Indian CAs on Global Pedestal

I aim to proactively promote ICAI qualification overseas, strengthen and widening relationship with international bodies and global standardsetters and regulators. I am endeavouring to create more professional opportunities for us abroad. The idea is to firmly establish our footprints on the world map. This month was mostly devoted to this cause. I am happy to share with you some of related significant developments:

Reaching Out to IFAC in New York: As you may be aware, India is one of the founding members of the International Federation of Accountants (IFAC), which is the global organisation for the accountancy profession comprising 179 members and associates in 130 countries. It is an ideal platform to showcase our presence and prestige and widen our role in global accounting affairs. With that objective in mind, I recently attended the IFAC Council and Board meeting held in New York. There we had one-on-one discussions on matters of mutual interest with IFAC President Mr. Warren Allen and other leading international accounting bodies. Building Bridges with US Through AICPA: I am happy to note that a large number of our young members are going global and acting as our veritable ambassadors abroad. Hundreds more are set to go abroad in near future and America is one of their most favourable destinations. I, on behalf of the ICAI, am fully inclined to assist and accentuate this welcome process. Driven by that goal, I utilised my New York visit to have mutually enriching meeting with the largest accounting body of the world-American Institute of Certified Public Accountants (AICPA). In the meeting, I specifically pushed the agenda of mutual recognition among other issues. To further pave way for our foreign bound professionals as well those already working abroad, I also met nine other leading accounting bodies. Consul General of India-New York Promises Support: I am happy to note and thankful to the Government for their support to the flag bearers of Indian accountancy profession on foreign soil through its consulates and embassies. I conveyed the same sentiments to Consul General of India in New York Shri Dhyaneshwar M. Mulay when I met him there. In very fruitful discussions, he has promised us his all support and help to open new chapters and empower our members in the North America region. A detailed report on my New York visit is published elsewhere in this journal.

IFASS Meet in New Delhi- A first in ICAI history

I think that running a business is not just about earning profits. It is also an art of ensuring that every invested penny is productive and well accounted for to facilitate reasonable assessment of performance by stakeholders. Here comes into play the importance of Accounting Standards. I see Accounting Standards as the best way to protect investors, ensure regulatory compliance, assess business performance and enhance corporate governance. This backdrop emphasises the great importance of standard-setting process, to which ICAI is deeply committed. Taking this objective forward, as set out in my agenda for this year to enhance our role in global standard-setting process, we recently hosted the International Forum of Accounting Standard Setters (IFASS) meet in New Delhi for the first time in the history of the ICAI. As many as 77 delegates representing 26 countries across the globe participated in the meeting. The meeting has gone a long way in establishing our role in developing a single set of high quality global accounting standards. As you may be aware, IFASS is an informal group of organisations committed to support the mission of IASB and pursue common interests of the accounting regulators across the globe.

Spearheading Convergence Drive via IFRS-RPF

You would agree with me that in the present age of ‘global business village’ where the world is craving and coming alive to the immense advantages of single business language, the utmost relevance of IFRS or Ind AS needs no reiteration. We can gauge global mood in this regard by the fact that more than 130 countries around the world, including all of Europe, currently require or permit IFRS reporting. As such, understanding IFRS or Ind AS is a business imperative for Indian companies too. This is because it will not only greatly help in boosting foreign investments but also benefit investors and other users of financial statements by refining the quality of information thereby enabling easy and better assessment of business performance on a global scale. I am happy to share with you that after the enactment of the Companies Act, 2013, the Ministry of Corporate Affairs has also now shifted its focus on rolling out Ind AS for Indian companies. The ICAI is very much alive to this emerging arena of great challenge as well as opportunity for its members. The Government has asked us to conduct a sector-wise study, elaborating on the impact the implementation of ‘Ind AS converged with IFRS’ will have on the sectors. In this backdrop, to have our say in the global drive for IFRS and put forward our perspective in this regard, we recently hosted the 8th IFRS Regional Policy Forum (IFRS-RPF) in New Delhi. The theme was Financial Reporting-New Frontiers. I am happy to note that the event was successful in achieving our stated objectives. As you may be aware, IFRS-RPF is a key platform in the Asian-Oceanic region for standards-setters, policymakers, regulators and government bodies.

Pushing Indian Agenda with IASB

Taking our ‘Mission IFRS Convergence’ forward and to put across our viewpoint on the issue, I also met International Accounting Standards Board (IASB) Chairman Mr. Hans Hoogervorst. He mainly called upon us to fully adopt the IFRS saying it will exemplify appeal of Indian capital markets to foreign investors. Here I must mention that we have very consciously decided to converge with IFRS and not fully adopt it, mainly because a resurgent India is very different from its peers in the West or elsewhere, with its own priorities and preferences. There is no change in that stand as of now. However, in the longer term we may consider his viewpoint, but only after sorting out some crucial issues and testing the impact of our converged Ind AS on corporate sector. I conveyed the same to him. A detailed report on IFASS and related events is published in this journal.

Pursuing Common Goals with SAFA

As you are aware, the South Asian Federation of Accountants (SAFA) is an important accountancy platform of our region, whose interests are intrinsically tied to ours. We share common goals and aspirations for the betterment of accountancy profession in the region. To push that common agenda of SAFA for the good of all of us, I recently attended SAFA events in Karachi. It was a very fruitful visit from our perspective during which I met representatives of all nine professional accountancy bodies from SAARC nations. I also had the opportunity to meet senior functionaries of Institute of Chartered Accountants of Pakistan and discussed issues of mutual interest.

ICAI Heralding Knowledge Revolution

I am sure you will concur with me when I say that close on the heels of Green Revolution, Industrial Revolution and IT Revolution, India is now well set for Knowledge Revolution. We Chartered Accountants, who are one of the main constituents of India’s knowledge society, are being increasingly looked upon as harbingers of such a revolution in India. As such, we are now all set to herald such a knowledge revolution in our own way, through upcoming ICAI TV channel. This will be dedicated to our about 8 lakh students in particular and commerce students across the nation in general. Stage is set for launch of this channel using the upcoming DTH platform of Ministry of Human Resources Development under the scheme National Mission on Education through Information and Communication Technology. Under the guidance of Union HRD Minister Dr. M. Mangapati Pallam Raju, I recently signed the first MoU on sharing the MHRD DTH Platform in this regard. The Union Minister announced: DTH channels would be used for imparting education for the first time, which is conventionally used only for entertainment. We have made a beginning with one of the most credible body in the country that is the ICAI. This is a great synergy between two bodies. I look forward to early launch of this channel for the ultimate benefit of our profession and the nation.

Industry Warming Up to our Placement Drive

I am happy to note that Industry is increasingly putting its trust in our young members and warmly taking them in their folds to be part of the ‘India Story’. This was in ample display during our Campus Placement drive for February-March period across India. In a tremendous response, as many as 80 organisations participated in the programme and offered 717 jobs to our newly qualified members. Highest salary offered under domestic posting is 21 lakh per annum to 2 candidates while under international posting it was 20.25 lakh per annum to 3 candidates. Average CTC offered to our newly-qualified members is more than 7.38 lakh per annum. I wish all our successful young members all the best for future and appeal to them to keep the flag of our profession flying high.

Let’s Gear Up for Effective Bank Audit

As you are aware, a healthy banking industry is the backbone of sustainable socio-economic growth in our country. However, I am constrained to note that our banking system is under strain because of mounting Non Performing Assets (NPAs), which according to Assocham study, is expected to reach 1,50,000 crore mark by end of FY14. As the keepers of financial discipline in the country, this situation should worry us all the more. Given our training, exposure and skills, we can play a crucial role in reversing rising trend of NPAs and vigilantly keeping our banking system healthy. By lending credibility to their financial statements, audits and auditors have an extremely important role to play in building a resilient banking industry. As such, the exercise of Bank Branch Audit assumes paramount importance for the banking industry, the banking regulator, our members, as well as the nation as a whole. Let’s conduct these audits in the most professional manner keeping a broader national vision in mind. You will be aware that to help you to carry out this nationally important assignment in most proficient and ‘value add’ manner, the Auditing and Assurance Standards Board has recently released its 2014 Guidance Note on Audit of Banks. This Guidance note contains comprehensive guidance on the various critical aspects that the members need to be wary of while conducting Bank Branch Audits. Let’s also ensure compliance with relevant Standards on Auditing while carrying out Bank Audit engagement.

Vote You Must

Before I conclude, let me remind you that with national elections having been announced, time has come for us to discharge our most onerous responsibility to our nation-casting our vote, especially for a resurgent India. We are a strong professional community of 2,24,000 members and about 8 lakh active students. We are a power to reckon with. Let’s vote to assert our affirmation and our faith in democratic principles and values.

Yours Truly

CA. K. Raghu President, ICAI New Delhi, March 24, 2014