Knowledge Portal

04/03/2011
ICAI sets up committee to define CSR
In an effort to plug the loopholes in social activities by corporates, accounting regulator Institute of Chartered Accountants of India (ICAI) has decided to come up a proper definition of corporate social responsibility (CSR). ICAI has set up a sub-committee to frame a clear definition of what would constitute as CSR. The recommendations of the panel will be forwarded to the corporate affairs ministry for approval. If the ICAI recommendations are accepted by the government, companies will have to invest in specific social projects to meet the requirements under the Companies Act. The need for defining CSR has been felt as corporate houses often invest in activities that may not be necessary at all, resulting in CSR losing its meaning and not giving the desired results. A proper definition will address the lacunae in the existing system.

08/02/2011
ICAI asks big four not to buy out Indian firms
Amid concerns of alleged ‘surrogate practices’ of the ‘big four’ accounting firms, Institute of Chartered Accountants of India (ICAI) has asked PriceWaterhouseCoopers, KPMG, Ernst & Young and Deloitte to desist from acquiring Indian audit outfits. “Worldwide, there is a talk that there should be decongestion of accounting profession. So that’s what we have suggested them (the big four). Instead of acquiring firms, please provide work to small and medium practitioners and go in for quality control,” ICAI President Amarjit Chopra said.Chopra made these comments days before the regulator is set to give its third report on the Satyam scam to the Ministry of Corporate Affairs. The report pertains to the alleged surrogate practice of the global auditing firms in India. Chopra, who is about to demit office on February 11, recently met representatives of the big four. “We advised them that rather than acquisition of Indian firms, go in for hand holding. It means they identify firms in each region and do the quality control,” he said.

25/01/2011
Satyam fraud not an accounting failure: ICAI
The Satyam scam was not an accounting or auditing failure, but one of corporate governance, said Amarjit Chopra, president, Institute of Chartered Accountants of India (ICAI). Speaking on the sidelines of an international taxation conference here on Monday, Chopra said, “There were promoter shareholders, executive directors and directors, and the auditors were the last rung. On the other side, there were independent directors, one of whom was a dean of the Indian School of Business, but nobody questions the role of independent directors.” Chopra also wanted the government to look at the role played by independent directors, saying one worthwhile suggestion by them could prevent such frauds. Chopra, however, conceded that chartered accountants too, should be more active to be seen as preventors, rather than facilitators of corruption. The objective of the profession is to reduce corruption, he added. ICAI, the regulatory body of chartered accountancy in the country, had reportedly found two PriceWaterhouse auditors, S Gopalakrishnan and Talluri Srinivas, prima facie guilty of professional misconduct. PriceWaterhouse was Satyam’s statutory auditor when the company's founder, B Ramalinga Raju, confessed to a massive accounting fraud in January 2009. The Central Bureau of Investigation, which investigated the Satyam fraud case, also charged the two auditors with “complicity in the commission” of the fraud by “consciously overlooking the accounting irregularities”.

24/01/2011
Unique Code Numbers to CAs to check fraudulent practices
The Institute of Chartered Accountants of India (ICAI) will introduce Unique Code Numbers (UCD) from next month for Chartered Accountants (CAs) to help them check increasing incidents of fraudulent practices, including forged attestations, ICAI President Amarjit Chopra said today. Once introduced, ICAI would ask banks to insist on UCD, as people file different balance sheets for various purposes without the knowledge or approval of CAs, he told reporters here. The institute is being assisted by the software giant Infosys in this endeavour, he said. He said ICAI, as part of 'Project Parivarthan' has initiated several operational process to meet global benchmarks.

03/01/2011
Auditors' selection process irks ICAI
Accounting regulator ICAI is opposed to the tendering process of selecting accountants for auditing state-run schemes and has taken up the issue with the Planning Commission and the CAG. The ICAI wants the appointment to be done through fixing the fees district-wise and not through tender saying it may lead to compromise of audit work. The appointment of auditors for scanning government schemes and projects is proposed to be done through tendering process, wherein the applicant quoting the lowest fees would get the project. However, according to the ICAI the appointment should rather be done through fixing the fees district-wise and not through tender as it may lead to compromise of audit work. "We had taken up the issue with the Comptroller and Auditor General (CAG) and the Planning Commission. We have requested that the L1 (lowest bidding) factor in audit can kill the entire concept of the audit." "It is no good. We have requested them to fix the fees scheme wise to ensure that if at all bids are there, they should be technical rather than financial," said Amarjit Chopra, President of the Institute of Chartered Accountants of India . ICAI has suggested that the CAG could fix the fees scheme wise and choose auditors for these schemes district wise and has also provided the Planning Commission and the official auditor with a list of chartered accountant firms across the country.

02/12/2010
No immunity for ICAI members: SC
The Supreme Court on Wednesday ruled that no immunity from prosecution can be granted to the members or nonmembers of the Institute of Chartered Accountants of India for their professional misconduct under the provisions of the Chartered Accountants Act, 1949. Such provisions cannot override the penal laws, said apex court setting aside the order of the Madhya Pradesh HC. “The object underlying the prohibition contained in section 28 (Chartered Accountants Act) is to protect the persons engaged in profession of chartered accountants against false and untenable complaints from dissatisfied litigants and others. However, there is nothing in the language of the provisions contained in chapter VII from which it can be inferred that Parliament wanted to confer immunity upon the members and nonmembers from prosecution and punishment if the action of such member or nonmember amounts to an offence under the IPC or any other law” , said a bench comprising Justice GS Singhvi and Justice AK Ganguly.

05/10/2010
ICAI seeks changes in accounting practices in commercial banks
The Institute of Chartered Accountants of India (ICAI), the national standard setting body of auditors, has proposed comprehensive changes to the current accounting practices in commercial banks to make bank audits foolproof and effective.The auditing restructure will imbibe the spirit of banking regulator Reserve Bank of India’s (RBI’s) Know Your Customer (KYC) principles and help check financial frauds, identify money laundering and suspicious activities and scrutinise large cash transactions.

18/09/2010
ICAI helps Indian companies take on MNC rivals
Accounting regulator Institute of Chartered Accountants of India is arranging easy financing schemes for its members through public sector banks, as it looks to help domestic audit firms enhance infrastructure and resource base to ward off competition from larger multinational rivals. ICAI has already entered into an arrangement with state-owned Corporation Bank, which will grant loans at liberal terms to small and medium firms, said an official with the regulator.

23/06/2010
Forged audits at SMEs; ICAI tracks spread
The Institute of Chartered Accountants of India (ICAI) has unearthed cases of financial statements and audit reports of certain companies with forged signatures of auditors, sparking off fear of a larger menace that may have hit the country’s auditing fraternity. At a time when the government is going all out to set right the audit profession, cases of forged audit reports have put the regulator on the defensive.

21/06/2010
Conduct code for analysts and i-bankers in offing
The government is mulling a comprehensive code of conduct for financial analysts and investment bankers to make them more accountable to the companies and retail investors they serve. A proposal in this regard from a high-powered committee of Institute of Chartered Accountants of India (ICAI) that investigated the financial scandal at the erstwhile Satyam Computer Services is under the consideration of the ministry of corporate affairs.

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