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| Profile - The Institute of Chartered Accountants of India |
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The Indian Chartered Accountancy Profession will be the valued Trustees of World Class Financial Competencies, Good Governance and Competitiveness.
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The Institute of Chartered Accountants of India (ICAI) is a statutory body established under the Chartered Accountants Act, 1949 (Act No. XXXVIII of 1949) for the regulation of the profession of Chartered Accountants in India. During its more than five decades of existence, ICAI has achieved recognition as a premier accounting body not only in the country but also globally, for its contribution in the fields of education, professional development, maintenance of high accounting, auditing and ethical standards. ICAI now is the second largest accounting body in the whole world.
ICAI has its Headquarters at New Delhi with 5 Regional Offices at Mumbai, Chennai, Kanpur, Kolkata, New Delhi and 114 branches spread all over the country. In addition, it has also set up 18 chapters outside India and an office in Dubai.
Currently over 350,000 students are pursuing the Chartered Accountancy course and the total membership of ICAI is about 139,841. Out of the total members, nearly 55% are in Practice and the rest are in employment. Among the members in government, industry, banks, financial institutions, private enterprises etc. a significant number of members occupy eminent positions in their respective organisations such as Chairman of regulatory body, Chairperson of banks and insurance companies, Chairperson & Managing Directors of reputed enterprises, Executive Directors of innumerable enterprises/organisations. Chartered Accountants are also serving as Vice-Presidents and Members of Income Tax Appellate Tribunals besides being in IAS, IPS and IRS cadres. The members of ICAI are also considered to be very competent even in the foreign countries as is evident from the positions they are occupying in all major cities of the world. Presently, there are about 12000 members working abroad.
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The affairs of ICAI are managed by the Council in accordance with the provisions of the Chartered Accountants Act, 1949 and the Chartered Accountants Regulation 1988. The Council consist of 40* members of whom 32 are elected by the members and remaining 8 are nominated by the Central Government to represent the Comptroller and Auditor General of India, Central Board of Direct Taxes, Department of Company Affairs and other stakeholders.
The Council functions through 4 Standing Committees – Executive Committee, Examination Committee, Disciplinary Committee, Finance Committee and 24 Non Standing Committees namely Accounting Standards Board; Auditing & Assurance Standards Board; Continuing Professional Education Committee; Committee for Members in Industry; Fiscal Laws Committee; Corporate & Allied Laws Committee; Committee on Ethical Standards; Expert Advisory Committee; Board of Studies; Committee on Corporate Governance; Professional Development Committee; Research Committee; Committee on Financial Markets & Investors’ Protection; Committee on Information Technology; International Affairs Committee; ICAI-ICWAI-ICSI Coordination Committee; Editorial Board; Committee on Insurance & Pension; Audit Committee; Committee on Trade Laws & WTO; Peer Review Board; Financial Reporting Review Board; Committee on Internal Audit; Committee on Accounting Standards for Local Bodies for carrying out the provisions of the Chartered Accountants Act 1949.
In terms of the Chartered Accountants Act, 1949, President is the Chief Executive Authority of the Council. The Secretariat of ICAI is headed by the Secretary who is in-charge of the office of ICAI as its Executive Head. The activities of ICAI can be broadly divided into four parts comprising of Technical Directorate, CPE Directorate, Board of Studies and the Administration, each one headed by the separate head. The other important wings of ICAI are the, Examination Department, Disciplinary Cell, Legal Department, Members and Students Services, International Affairs, Research, etc. ICAI has also set up ICAI Accounting Research Foundation under section 25 of the Companies Act 1956.
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The main functions of ICAI of the Chartered Accountants of India are prescribing qualifications for membership, holding examinations and arranging practical training of candidates, enrollment of members, publication and maintenance of register of members qualified to practice the profession, carrying on activities for development of the profession and regulation and maintenance of status and standard of professional qualification of the members. ICAI conducts examinations all over the country, provides postal coaching, oral coaching and arranges practical training, enabling students to qualify for the profession. It also organises seminars, workshops etc., and provides library facilities.
ICAI conducts research and brings out handbooks and publications/ monologues on the subject of direct interest to the profession. It explores the opportunities for employment of its members. In addition, it issues certificates of practice to its members and exercises disciplinary Jurisdiction* as quasi-judicial authority over their profession and their conduct. ICAI coordinates with Universities on shaping their accountancy curriculum linked with the Chartered Accountancy course. It also publishes monthly journals for Members and for Students.
Besides regulating the profession, ICAI is a national standards setting body in India and the Accounting Standards framed by it are given statutory recognition under various statutes. The Indian Accounting Standards have almost been harmonised with the International Accounting Standards (see Annexure).. In addition, the ICAI issues from time to time, various Guidance notes, monographs, etc. for the guidance of its members on various new technical issues.
The ICAI also issues Auditing & Assurance Standards (AAS) which codify the audit practices to be followed by the members of the Institute, whenever an audit is carried out. The AASs are mandatory in nature. The ICAI has issued 34 AAS so far which meet the international benchmarks and expectations (see Annexure).
* As per the Chartered Accountants (Amendment) Act 2006, exercise of Disciplinary powers has been deleted from the list of duties assigned to the Council.
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| All statutory functions and many other important functions assigned to the Council by the Chartered Accountants Act, 1949 are implemented by the Administration. Some of the functions are: - |
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Engagement and training of articled/audit assistants, |
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Conducting examinations for candidates of the CA Courses, |
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Enrolment of eligible persons as members, |
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Granting and refusal of Certificate of Practice to members, |
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Exercise of disciplinary powers over members and students |
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Removal of member names, |
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Restoration of names, |
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All matters related to personnel and their development, |
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Maintaining liaison with the Govt., regulatory bodies, industries, Chambers of Commerce and professional bodies. |
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The Technical Directorate provides support to the technical committees of the Council namely Accounting Standards Board, Committee on Accounting Standards for Local Bodies, Research Committee and Expert Advisory Committee. The Technical Directorate deals with all matters connected with accounting standards, accounting standards for local bodies, expert opinions and any other matter relating to specific accounting issues by issuing the Guidance Notes, Technical Guide on accounting and auditing, study etc. on various technical accounting issues and industry specific accounting issues as research publications.
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The functions of the Board of Studies are primarily to impart education to the students of the Chartered Accountancy Courses basically through distance education mode. The syllabi which has been recast with effect from Sept, 2006 meets the requirements of International Education Standards issued by International Federation of Accountants with contents of comprehensive theoretical and practical curriculum. The Board also takes care of the revision of syllabi of the various courses periodically. It also oversees the performances of various Accredited Institutions which have been authorized to impart oral coaching to classes and imparting compulsory computer training students.
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ICAI has launched a new curriculum shortening the course duration to 4 years and modernising the syllabus. The cream of the younger generation is showing overwhelming response to the new curriculum. The first CPT attracted about 28000 candidates who excelled as indicated by 66.3% result.
The steps involved to qualify as a CA by 21 years are as follows:
- Pass class 10th Examination.
- Register for Common Proficiency Test (CPT) with the Board of Studies of the ICAI.
- Simultaneously, pursue school education and appear in 10+2 Examination.
- Appear in CPT Exam.
- After passing Senior Secondary (12th or 10+2) examination and CPT, register for:
- Practical training of 3½ years duration.
- Professional Competence course
- Information Technology Training
- Complete Information Technology Training of 100 hours before appearing for PCE.
- Appear for PCE on completion of 18 months of Practical training. PCE comprise of two Groups of three papers each.
- Undergo General Management & Communication Skills (GMCS) Course after 18 months of practical training and completion of PCE.
- Qualify in PCE and complete 3½ years of practical training to be eligible to appear in Final Examination.
- Appear and qualify the Final Examination, which comprises of two Groups of four papers each.
- Enroll as a member of ICAI and choose to either join employment or set up an office of your own to practice.
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The ICAI Examination network has grown in size and stature since its inception in 1949 when about 450 candidates appeared in the first examination conducted by the Institute. Today, it is one of the largest amongst the accounting examination networks worldwide with about 110,000 students appearing in the ICAI exams which are held twice every year at about 173 centres spread across 95 cities in India besides, two centers abroad at Dubai and Kathmandu. ICAI has also granted Examination Centre to Abu Dhabi from May 2007 onwards. The ICAI is also lending its expertise in designing foolproof system of examination, to accounting bodies in other countries.
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In the complex and globalised economic environment it becomes evident for every professional to keep himself abreast of each amendment and all professional/technological changes taking place in their respective fields. The Continuing Professional Education Directorate of ICAI assumes the responsibility of updating the members on professional issues arising out of new legislation, technological changes and latest pronouncements of ICAI as well as other developments relevant to the profession. The modus operandi adopted in this regard is the holding of seminars/training programmes, conferences, publication of technical material, teleconferences etc.
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With effect from Jan 2003, the Continuing Professional Education (CPE) has been made mandatory for members in practice and for the year 2006 members will have to earn 20 hours of CPE Credit by undergoing approved learning activities. Members not in Practice are recommended to earn 10 CPE hours.
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The continuing Professional Education Committee of ICAI has shortly launched a CPE Portal for recording and grant of CPE hours for the members and the Programme Organising Units respectively. Further, the Committee shall shortly introduce Smart Cards for recording of CPE hours for the members of the Institute.
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In the context of growing of specialization in the different facets of accounting profession alongwith the increasing complexity of the business environment, ICAI has been concerned with finding ways and means to equip its members with the specialized knowledge as would enable them to constructively advise and assist management in all spheres to improve their operational efficiency, to enable them to bring economy in their production costs, to increase production by effective utilization of the available resources, and in general to achieve a rapid industrial and economic growth.
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In order to provide specialized knowledge, ICAI offers Post Qualification courses in Management Accountancy, Corporate Management and Tax Management. ICAI has also introduced courses in more emerging areas like Information Systems Audit, Insurance & Risk Management and International Trade Laws & WTO. ICAI also holds a programme on Computer Aided Auditing Techniques (CAAT).
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The ICAI has a pro-active Disciplinary Cell to ensure compliance of professional ethics and Code of Conduct in terms of the Chartered Accountants Act as well as various pronouncements issued by the Central Council of the Institute. ICAI not only entertains complaints from Stake Holder/User Group but also takes suo-moto action in cases which come to the knowledge of ICAI through external information. The provisions contained in the code of conduct of ICAI are most stringent as comparing to any other in the World and the actions taken by ICAI against the defaulting members are also very stringent.
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Peer Review Board:ICAI had taken the initiative of introducing a system of Peer Review to further enhance the quality of professional work of practicing chartered accountants over a period of time, and for the purpose constituted a Peer Review Board in 2002 with the following objectives.
- Peer Review Board undertakes reviews so as to ensure:
- compliance with technical standards; and
- existence, compliance and adherence to quality control policies and procedures
- Their findings would not have any relationship with the disciplinary proceedings
- The mechanism is to be implemented in three stages with different types of practice units being covered in each stage.
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The first stage of implementation of the Peer Review mechanism commenced w.e.f. 1st April, 2003.
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Financial Reporting Review Board: ICAI has also constituted a Financial Reporting Review Board (FRRB) which suo-moto looks into the published accounts of different organisations including banks and financial institutions. If any deficiency is observed as a result of review made by the Board, the findings of Board form the basis for initiating action under the disciplinary mechanism in place. During the year 2005-06, the Board has selected 125 companies for review of general–purpose financial statements for the year 2003-2004 and auditor’s reports thereon, on a random basis.
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With the advent of globalisation and the challenges posed by the liberalization process taking place worldwide, a need was felt for consolidation of Chartered Accountancy Firms through Networking, Mergers & Demergers, corporatisation of Practice and formation of Multi-disciplinary firms. ICAI has decided to allow Networking of CA Firms registered with ICAI and also to permit the members of ICAI to form multi-disciplinary firms.
ICAI has allow its Members to prefix the expression “CA.” before their names. ICAI has decided to prescribe a common logo for the Indian CA Firms. ICAI has named all its premises in India as ‘ICAI Bhawan’; prescribe uniform dress code for members; adopt single telephone number throughout the country. |
ICAI is a founder member of various International professional bodies such as the International Federation of Accountants (IFAC), Confederation of Asian and Pacific Accountants (CAPA), South Asian Federation of Accountants (SAFA), besides the International Accounting Standards Board (IASB). It has also become a founder member of the International Innovation Network (IIN). It has played a prominent role in the International Bodies through its nominees who have worked and are working on the governing Council as well as various Committees of those bodies.
The ICAI is playing an increasingly proactive role in International Affairs and has drawn up a strategy with the aim of export of professional services in a big way to enable Indian Professionals to take the lead in International Affairs and come at par with those from the developed Countries.
Institute’s initiatives in respect of different countries have been as under: |
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Nepal: ICAI has already achieved a major mile stone by providing technical and institutional support in establishing the Institute of Chartered Accountants of Nepal (ICAN) The Indian Members can also take Membership & Practice of Nepal by following limited conditions of ICAN. ICAI is rendering technical assistance to ICAN in area of CPE, Peer Review, disciplinary mechanism, standard setting, research and Information System Audit. |
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Sri Lanka: ICAI has been rendering technical assistance to Institute of Chartered Accountants of Sri Lanka in the area of specially designed course in Information Systems Audit. Mutual Recognition Agreement of Qualification with Srilankan counterpart is on anvil under framework of CECPA in near future. |
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UAE: ICAI signed A Memorandum of Understanding (MOU) with the Centre of Excellence for Applied Research and Training (CERT), a body set up in the UAE under the Ministry of Education with the mandate to develop the human resources of UAE, to establish an independent Institute for promoting chartered accountancy as a profession. In terms of the MOU, ICAI will conceptualise and devise an international curriculum in accountancy integrating local needs and keeping in mind various requirements of different levels of accountancy and audit professionals. |
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Singapore: With the signing of Comprehensive Economic Cooperation Agreement (CECA) between Government of India and Singapore; a MRA for recognition of qualification between the ICAI and Institute of Certified Public Accountants of Singapore is on anvil and is likely to be formalized shortly. |
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Mauritius: The Indian qualification is already recognized under the Mauritius Companies Act and the Indian members can practice there. A MRA with the Mauritius Institute of Public Accountants is also contemplated under the framework of Comprehensive Economic Cooperation and Partnership Agreement between the Government of India and Mauritius. |
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Other Initiatives: This apart ICAI has been striving to have the mutual recognition of its qualification with the accountancy bodies in other countries and in this regard partial exemptions in certain papers have already been granted by the accounting bodies like CPA Australia, CGA Canada, ICAEW UK, ICA New Zealand. Efforts are also being made to have the matter of Qualification Appraisal furthered with the United States, Canada and Australia as well. |
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ICAI as a Virtual Institution: In the recent years the ICAI has grown in its size as well as in its operations. ICAI has launched the Virtual Institution Project whereby e-Regulation is expected to be in place shortly and the projects of e-learning and e-education would be largely accomplished. The Knowledge Portal would be able to meet all knowledge and information needs of the members particularly small and medium sized, to a large extent. As a Virtual Institution, it would be able to provide all kind of services to members and students at their doorsteps.
ICAI’s e-Seva for Members and Students: ICAI with the objective of serving the interests of its members & students has started e-seva project. E – Seva project has been conceived with the idea of taking ICAI to a qualitatively new way of working which would bring together both aspiring and existing chartered accountants in the country to come together as a virtual community. The goal of the Virtual Institute Project is to create a single integrated system for catering to the entire community of chartered accountants, irrespective of their geographical locations, through the virtual medium of Internet.
Digital Certification : The ICAI has become India’s first educational institution to acquire Digital Certificate issuing capability as a Sub-Certifying Authority. Through this initiative, ICAI makes a significant stride towards completely digitizing its operations and become a “Virtual Institution”. ICAI issues digital certificates to all its users for secure communication through digital signatures. ICAI’s users are now able to communicate securely and perform electronic transactions that are legally recognized by the Indian IT Act, 2000
In order to bring its services to users’ fingertips ICAI plans to leverage the convenience and ubiquity of the Internet through its “Virtual Institution” - ERP System. PKI-based Digital Certificate technology will play a crucial role in making this initiative a success.
E-learning: ICAI is launching web-based learning for members on consultancy management which is a post qualification certification course. Similarly, for CA students, e-learning is sought to be provided to enable them to learn through web-portals.
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The Institute, as a part of its role in aiding pro-active process towards better governance is called upon to interact with various regulatory/statutory authorities in India on issues of interest touching upon the profession and otherwise. The Institute, on its part, is putting the vast experience of its structure and its members at the disposal of those charged with governance. In this process, the Institute, at regular intervals, provides technical advice and necessary inputs to:
- Comptroller and Auditor General of India – technical advice in response to references received including maintenance of audit panels, issues arising out of audit and accounts of government companies and public sector undertakings. Besides, ICAI contributes by being part of C&AG initiative to bring reforms in Government Accounting.
- Ministry of Company Affairs – inputs in regard to matters relating to corporate laws and responds to technical issues, by way of offering comments/views/suggestions etc., on receipt of relevant references. ICAI is actively contributing in Company law reforms, Limited liability partnership legislation and e-governance initiative MCA 21.
- Reserve Bank of India – technical advice and maintains constant touch in regard to matters pertaining to bank audits and audit of non-banking financial companies etc.
- Securities and Exchange Board of India – maintaining constant touch and offers views/suggestions and also hold discussions in all matters touching upon the profession of Chartered Accountants. ICAI has been bringing out publications on Capital Market Regulations and Clause 49 of Listing Agreement.
- Central Board of Direct Taxes – actively associating in the process of formulation of budget by offering pre-budget and post-budget suggestions/comments. Actively involved in offering suggestions to simplify tax laws and their administration for the purpose of making it more responsive to tax payers.
- Insurance Regulatory & Development Authority – helping the authority in redesigning the format of accounts of insurance companies both in the life and non-life sectors and provides necessary inputs in response to references received.
Following the initiative taken by the Institute, more and more Departments of the Central and State Governments of the country are approaching ICAI for utilising the services of chartered accountants for advice on economy in expenditure, development of control mechanism over public funds, optimum and effective use of funds.
In addition, ICAI also provides necessary inputs, from time to time, to the Trade Policy Division, Ministry of Commerce of the Govt. of India so as to enable the Indian Government to take part in a more effective manner in negotiations under GATS/ WTO.
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