President's Message - September 2011 - (30-08-2011)
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Dear Friends,
Let me first offer my sincere regards to the former President of India
and great philosopher Dr. Sarvepalli Radhakrishnan on the eve of the
Teacher’s Day that is celebrated on 5th September, i.e. his birthday,
every year in his memory. Personally, I would like to take this
opportunity to remember my own teachers who introduced me to life and
its meaning, who guided me to the path of public service, and who let
me understand the meaning of human existence and dignity.
Dr. Radhakrishnan had a strong belief in the sanctity of work and
ethics of profession, and he had expressed this before the members of
accountancy profession once in Chennai (then, Madras): My feeling is
that whatever may be our profession, it is our duty in these critical
days to carry out what we do in a spirit of utter rectitude, honesty
and detachment. Checkpoint question for all of us, at present, is: Do
we find it odd, strange or nostalgic when we hear such thoughts? If
our answer is in affirmative, we need to change the fundamentals of
our existence. It is strange that diligent and ethical execution of
duty is often considered exceptional today, i.e. not normal, which is
nothing but what we expect from others. For every right, there will be
a comparable civil responsibility.
It has become a matter of greater concern for us how to restrict the
limits of our responsibility. We appear to be afraid of our
responsibility, our duty, which is nothing but just the other side of
rights, according to the celebrated author Pearl S. Buck. When we are
young, we want to grow up in order to have more freedom as we feel
constrained. But, when we grow up, we become nostalgic about our
childhood when we had no responsibility. We basically do not like
freedom that comes to us with responsibility. American
industrialist-philanthropist John Rockefeller who made it very big in
his life and, later, gave half of what he earned back to his society,
conscientiously agrees: I believe that every right implies a
responsibility; every opportunity, an obligation; every possession, a
duty. Introducing bills after bills on rights in our democracy has
made us a little compliant, it seems. For a change, why do not we
think in the direction of introducing a bill on responsibilities?
All of us have a right to life, a fundamental right, which makes all
other rights possible. Right to express our beliefs and opinions in
public and in private is also fundamental to our existence in a civil
society. And, along with these rights comes our duty and
responsibility, which is part of our dignified and responsible
coexistence. The word duty entails an act of obligation, as duty is
work that we are obliged to perform for moral or legal reasons.
Responsibility, however, has become disintegrative today that is
coolly shifted to the shoulders of fate, luck or people from the
circle of our existence. It is a sad social reality that everything
righteous has turned out to be exceptional these days, which we should
be worried about. Naturally, numerous instances of non-performance
make examples of performances appear exceptional.
In such moments of difference and indifference, our profession can
show a ray of hope to our society. In the very formative stage of our
profession, ethics had been identified as an essential fundamental and
social responsibility as a reality of the profession by our founding
members. Let us vow to trade the path of ethics and be more duty-bound
while presenting better examples before our society.
Now, let us look into the recent change and development with regard to
the accountancy profession that has taken place in the past one month
or so:
Shri Naved Masood, the New Corporate Affairs Secretary
Here I would wish to congratulate and welcome Shri Naved Masood on
becoming the new Secretary in the Ministry of Corporate Affairs. As
you may be aware, he has replaced Shri D. K. Mittal, both of whom
belong to 1977 batch of Uttar Pradesh cadre of Indian Administrative
Service. Here I would also acknowledge and record my appreciations for
the immediate past-Secretary of the Ministry, Shri Mittal, for his
active and effective support and initiatives in the interests of the
profession. Shri Mittal is now the Secretary for the Department of
Financial Services in the Ministry of Finance. I take this opportunity
to offer him my best wishes and regards for all his future roles and
responsibilities. Before joining the MCA, Shri Masood was the Special
Secretary and Financial Advisor in the Department of Health and Family
Welfare in the Ministry of Health and Family Welfare. He has been
quite passionate about the history and growth of higher education,
which is obvious from the fact that he has published many e-articles
on the same. On assuming his office, I along with Vice-President CA.
Jaydeep N. Shah meet Shri Masood and apprised him about the activities
of the Institute.
Professional Initiatives
Meeting with RBI Deputy Governor: Recently, we held a meeting with Dr.
K. C. Chakrabarty, Deputy Governor, Reserve Bank of India where I was
accompanied by CA. Jaydeep N. Shah, Vice-President, ICAI, CA. Pankaj
Jain, Member, Central Council, ICAI and Shri Vijay Kapur, Director of
the Institute. During the discussion, Shri P. Vijay Bhaskar, Executive
Director and other RBI officials were also present. We discussed
various issues of mutual professional interest including one raised by
RBI on increased divergence between the NPAs as certified by auditors
and those found in RBI inspections, variation amongst banks in respect
of assumptions in the context of earning of funds, salary structure,
etc., in case of provisioning of retirement benefits, classification
of advances and so on. We took this opportunity to raise the issue
pertaining to appointment of auditors and, then, we were informed that
a list in the ratio of 1:3 had already been sent to the Ministry for
necessary action.
We are also had a meeting with Shri D.K. Mittal, Secretary, Department
of Financial Services, Ministry of Finance regarding appointment of
auditors of Public Sector Banks.
Meeting with Deputy C&AG: This is also to inform that a meeting was
recently held with the Deputy Comptroller and Auditor General of India
Shri A. K. Awasthi, wherein it was requested to at least empanel those
firms, which are being disqualified from the panel maintained by the
Office of the C&AG due to the application of minimum compensation
criteria, so that they are eligible to get themselves empanelled or
apply for such other panels which use the panel of the C&AG as
yardstick like DRDA, NRHM, etc.
Developing ICAI Vision: In a meeting held recently in the presence of
our honourable Past-Presidents to identify the strategic directions of
the profession and ICAI for the challenging time ahead and develop a
comprehensive work-plan by leveraging the wisdom and experience of our
Past-Presidents, we identified some very stimulating and
thought-provoking suggestions and actionable points. Learned
participants strongly felt that the IT had to be adopted as backbone
of the Institute to serve our members and students better, while
impressing upon nurturing and engaging quality human resource and
extolling the initiatives like Project Parivartan, Web TV, IFRS
Implementation programme, XBRL, and so on. It was decided to develop
the Vision Document of the ICAI by January 2012, while expressing an
opinion that the Vision/Strategic Action Plan of the Council should be
for duration of three Years.
Suggestions on CARO 2011 for MCA: Ministry of Corporate Affairs had
sought our suggestions on the Draft Companies (Auditor’s Report to
Central Government) Order, 2011 that has been proposed to be issued by
the Ministry. We have considered and finalised our suggestions on the
Issues involved in issuance of the proposed Order, specifically, its
impact on the auditors and the auditing profession, and we would soon
take up the matters suitably with the Ministry.
In addition to the above new Order, MCA is also proposing to replace
the existing Companies (Auditor’s Report) Order, 2003 by the Companies
(Auditor’s Report) Order, 2011. Our views and suggestions on this new
order are also being finalised and would be soon submitted to the
Ministry.
Meeting of C&AG’s Audit Advisory Board: This is to inform our
stakeholders that I recently attended the meeting of the Audit
Advisory Board constituted by the Comptroller & Auditor General of
India, where we discussed social audit and our involvement in that.
Meeting of Concurrent Audit Working Group: This is also to inform that
I recently attended meeting of the Concurrent Audit Working Group
constituted by the IBA, the RBI and the ICAI, where we considered
issues relating to the scope of concurrent audit, the fee, etc. We
agreed to recommend to the various banks, the minimum scale of fees as
recommended by our Council. The report of the Working Group is
expected to be finalised by the September 2011.
Initiatives for Government Offices/Officials
Accounting Training for Autonomous Bodies: In continuation with our
efforts to impart training on relevant accounting concepts, we are
organising a series of training programmes in collaboration with the
Office of Comptroller & Auditor General of India for the officials of
Autonomous Bodies and Members of the Profession. The objectives of the
training programmes are to fill the gap and help the organisations to
familiarise with the concepts and techniques of the financial
reporting and adherence to the uniform format of accounts prescribed
by the Committee of experts. Moreover, need is felt to keep these
officials abreast with the requirement of transparency and exposure of
professional skills. The first such programme was organised in Mumbai
and the second programme was organised in Noida which showed the
participation of 117 Autonomous Bodies of Delhi such as JNU, Jamia
Millia Islamia, AIIMS, NCERT, Competition Commission of India. In this
series, next programme is scheduled in Centre of Excellence, Hyderabad
for 8th and 9th September, 2011 which would seek the participation of
Autonomous Bodies from Andhra Pradesh and Orissa.
Supportive Acts for IT Department:
Illustrative Master Guides on TDS Submitted: During the meeting of
Standing Committee on TDS while discussing the probable solutions to
the difficulties being faced by the assessees, it was submitted by us
that a Master Circular incorporating all the circulars/notifications/
instructions etc. issued by the CBDT on a particular subject be issued
for the convenience of taxpayers and the same may be updated
half-yearly or yearly. Considering the suggestion of ICAI, Mr.
Ashutosh Bhardwaj, DIT (TDS) had requested ICAI to provide a draft
master circular so that the suggestion given by ICAI could be taken
forward. Accordingly, illustrative Master Guides on two subjects were
prepared and submitted for the consideration of DIT (TDS).
Single Direct Taxes Return Form: As you are aware, we had consented to
CBDT to provide assistance in the formulation of draft Rules and Forms
for the Direct Taxes Code Bill, 2010. In this regard, on the basis of
the request received from Mr. D.S. Chawla, CIT (Systems) who is
incharge of drafting Forms relating to Direct Taxes Code, a single
direct taxes return form (instead of various ITR’s as under the
existing law) for the Direct Taxes Code Bill has been submitted for
his consideration. The Form so submitted has been appreciated by the
CIT (Systems).
Advice Camps: We have made our presence felt with our expert advice
and services at the special camps hosted by the Income–tax Department
in New Delhi recently in pursuance of a request received from the
office of the Joint Commissioner of Income-tax to provide costfree
services as direct-tax experts and give expert advice on queries
raised by the assessees at the camps.
Matter Submitted for Meeting to be attended by FM: I had received a
request to participate in the meeting of the Central Direct Taxes
Advisory Committee under the chairmanship of the Honourable Finance
Minister of India Shri Pranab Mukherjee to be held in the first week
of September, and accordingly a submission of matters for discussion
in advance. Considering the objectives of the Committee, matters of
wide importance have been submitted within the desired time frame. I
will keep you updated about the outcome of the meeting.
Report on Multinational Network Accounting Firms in India Submitted: I
am happy to inform you that we have finalised the Report on
Multinational Network Accounting Firms in India and submitted the same
to the Secretary of the Ministry of Corporate Affairs recently.
International Initiatives
IFAC President and CEO Visit ICAI: I am glad to inform you that an
IFAC delegation with its President Mr. Goran Tidstorm and Chief
Executive Mr. Ian Ball had visited us recently to present the IFAC
viewpoint on key emerging issues on high-quality technical standards
in IFRS, facilitating the convergence of national and international
auditing and assurance standards and promoting the value of
professional accountants. The delegation had also met the
representatives from the Ministry of Finance, the Ministry of
Corporate Affairs, the Ministry of Commerce and Industry, the office
of the Comptroller and Auditor General of India and the Controller
General of Accounts.
India-Japan IFRS Dialogue in Bengaluru: To promote bilateral
relationship between the two countries, we recently hosted the second
India-Japan IFRS Dialogue in Bengaluru. More specifically, the purpose
was to address the critical issues relating to application of or
convergence with IFRSs and reach consensus through process of
consultation mutually agreed to, to promote the profession’s role,
responsibilities and achievements in serving public interest, and so
on. The Dialogue had active participation from the Securities and
Exchange Board of India, the Comptroller and Auditor General of India,
the Controller General of Accounts, the Pension Fund Regulatory and
Development Authority, the Central Board of Direct Taxes, the Reserve
Bank of India, the Insurance Regulatory and Development Authority,
among others, which was followed by an interactive meeting with more
than 100 CFOs.
Singapore Delegation Visits ICAI: A delegation from Singapore
comprising Mr. Tan Boen Eng, Council Member, ICPAS (Institute of
Certified Public Accountants of Singapore), Ms. Regina Tan, Ministry
of Trade and Industry, Singapore, and Ms. Janet Tan, Executive
Director, ICPAS, came to visit us recently to carry forward the
dialogue of recognition agreement and to assert that the launch of the
Singapore qualification program (QP) was in process, which would be
the sole qualification for membership admission and also the basis for
negotiating MRAs. The delegation has requested us to put the talks of
bilateral co-operation on hold till the implementation of the QP in
2012.
SAFA Assembly Meeting and ICAP Golden Jubilee Celebrations: I had an
opportunity to attend the 73rd SAFA Assembly meeting and ICAP
(Institute of Chartered Accountants of Pakistan) Golden Jubilee
Conference on the theme Accountants and Social Responsibility, along
with the ICAI Secretary Shri T. Karthikeyan, held recently in Karachi,
Pakistan. I also participated in one of the panel discussions, i.e. on
Fostering Talent for Leadership: A Regional Perspective, where the
heads of various accountancy bodies highlighted activities of their
respective institution with a focus on the development of accountancy
profession in their country.
AOSSG Chairman’s Advisory Committee Teleconference: Fifth
teleconference of the Asian- Oceanian Standard-Setters Group (AOSSG)
Chairman’s Advisory Committee was held recently, where I along with my
Central Council colleague CA. Manoj Fadnis among others participated,
where updates on the activities of Working Groups of Islamic Finance,
Emission Trading Schemes, Fair Value Measurement, and Agriculture were
provided. Discussion on the International Accounting Standards Board
(IASB) agenda consultation also took place. During the teleconference,
the criteria and process for appointment of an AOSSG Vice-Chair was
also discussed.
Initiatives for Members
Handbook on E-Filing of IT Returns: In order to enable our members to
update and equip themselves with the latest technologies, we have
taken an initiative by providing a Handbook on The Process of E-Filing
of Income Tax Returns that would act as a ready-reckoner for our
members and serve as a guide for the articled trainees in e-filing of
the income tax returns. This handbook has also been hosted on our
website and mailed to all our members.
Quick Insight for Profession: I am happy to announce that we would
soon bring out a Quick Insight on CA profession to be circulated to
all CA firms/ practitioners for ready reference, which has been
designed to include matters relating to direct and indirect tax,
accounting standards, list of mandatory statements and standards on
auditing, peer review, information regarding forms relevant to
students, websites, contact e-mail ids of Committees of the Institute
and that pertaining to the Companies Act, 1956 and LLP. I am sure that
the members will find this initiative very useful and looking forward
to your feedback on the same.
Development in Internal Audit: To inform our member community, we
considered the proposal to make the Standards on Internal Audit
mandatory in a recent Council meeting and decided to keep all the
Standards recommendatory for our members for the time being. It is
decided that the Internal Auditor’s report should also state that the
internal audit has been conducted in accordance with the Standards on
Internal Audit issued by the ICAI. We have also decided to initiate a
dialogue with the government/regulatory authorities like RBI and SEBI,
to the effect that internal audit must be carried out by the chartered
accountants or by the firms of chartered accountants, as
professionals/ professional companies other that chartered accountants
carrying the audit are not subject to any disciplinary mechanism.
Orientation Programme for Newly-Qualified CAs: It is a pleasure to
inform our stakeholders that we have conducted quite successfully an
Orientation Programme recently in New Delhi for newly-qualified CAs to
help them in preparation for interviews for the companies
participating in the ongoing campus placement programme of the ICAI. I
along with Shri Sachin Pilot, Honourable Union Minister of State,
Communication and Information Technology, inaugurated the programme in
the presence of the ICAI Vice-President CA. Jaydeep N. Shah and my
Central Council colleagues CA. K. Raghu, CA. Pankaj Tyagee, CA. S. B.
Zaware, CA. Madhukar N. Hiregange, CA. Sanjay K. Agarwal and CA. Vinod
Jain. The programme was well attended by more than 1800
newly-qualified members of the Institute.
ICAI Awards for Excellence in Financial Reporting
The various modalities related to the competition ‘ICAI Awards for
Excellence in Financial Reporting’ for the year 2010-2011 are
currently underway. This year the competition is being held under
sixteen categories. These categories have earlier been revised during
the year to bring them in sync with the SAFA Best Presented Accounts
Awards and a new category of ‘Agricultural Sector’ has been introduced
which will include entities engaged in direct agriculture,
horticulture, tea and coffee plantations, dairies, poultry, etc. but
will exclude entities engaged in food processing, etc. which will be
covered separately in Manufacturing Sector. The category of Banking
Sector has been subdivided into Public Sector Banks, Private Banks
(including co-operative banks) and Foreign Banks. Further two other
new categories- ‘Transport, Shipping, Ports, Shipping/Port allied
Services’ and ‘Power Sector’ which will include the generation,
distribution, transmission entities as well as other entities involved
in the business of renewable energy have also been introduced.
Initiatives for Students
Important Decisions for Effectiveness
Counselling Programmes for Motivation: We have decided to organise
students’ counselling programmes at all Regional Councils and Branches
for CPT, IPCC and Final students to be organised twice a year. These
programmes are conceptualised to guide our students in clarifying
doubts that they face while attempting the question papers during
examination and to motivate them suitably. In this regard, a special
booklet to guide the students “How to Crack CA Examinations” is also
being prepared and will be released shortly.
We are also in the process of preparing a Mock Test Paper Series which
will be sent to all the Branches so that they can hold a Mock Test to
provide our students a firsthand opportunity to assess their
preparation for examinations. These counselling programmes and Mock
Test will surely help all our students in improving their performance
in the actual examinations.
Faculty Development Programmes: Further, it has been decided to
organise faculty development programmes at all five Regional Councils
with a view to strengthen the existing base of faculty members/subject
experts available with each of the Branches. We hope that, by
organising such programmes, many Branches would be able to commence
classes and provide guidance to our students on one-to-one basis.
GMCS Residential Programmes be More Effective: We have also decided to
reduce the duration of the General Management and Communication Skills
(GMCS) residential programmes from six to four weeks and to
re-emphasise soft skills, case studies, mock interviews, group
discussions, etc., with a little increase in programme fee from
R30,000/- to R40,000/- in order to provide more effective faculty and
amenities. However, total numbers of learning hours will be the same.
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Human dignity is to be respected. Human identity is to be respected.
And, above all fundamentally, all human beings are to be respected.
Democracy decentralises the power and gives its control in the hands
of common people, i.e. their (elected) representatives. I feel happy
to learn that people in our nation are conscious about the evils of
their society and they want to get rid of them. We, too, have always
taken a hard stand against all unethical instances in our profession.
Our Institution too has a system that is made up of elected
representatives from all regions of our nation. This very spirit of
democracy in our Institution prevents it from becoming biased in its
dealings with unethical instances in profession, if any. Since
inception, we have never failed in the delivery of right, bias-free
and timely decisions, as our Institution has been accountable to the
complete accounting community of our nation. It is surprising that
only a few instances of injustice make us lose our faith in democracy.
We start looking for another system in place of that. What will happen
if the new system doesn’t work? Ibrahim Zauq, an Urdu poet of repute,
also asks: We decide to die after getting into many difficulties. But
if we do not get peace even after death, where will we go then? We, in
fact, need to make our existing system work. Running away from that
and creating another system in place will take us further away from
our faith in democracy. Restoration of faith in democracy should be a
bigger concern today. Imagine raising the bar of ethics to such a
height that all that is unethical loses its identity. Isn’t this
perspective Gandhian in spirit?
In democracy, the system is in our hands. It will be wrong to blame
others for any weakness in the system. Erica Jong challenges us when
she says: Take your life in your own hands, and what happens? A
terrible thing: no one to blame. Moreover, blaming others is a state
where we willingly show that we have given up our power that could
have changed things, which should not be an option, as it will isolate
us all the more. Imagine something doesn’t work right in a family.
What will be our next step? Somebody has said it quite wisely that if
we participate in weaving a social fabric, we should also participate
in patching that if it develops holes.
The need today is to restore public faith in the power that it might
use anytime to effect a change. We need to take control of our destiny
through our responsibility. The reason behind our compliance might lie
in our decision to run away from our responsibility and in thinking
that a system that we have created will take care of that. We fail to
act. All institutions require continuous watch and actions by their
stakeholders to function and prosper. Let us take the onus of the
consequences of our own actions.
Ultimately, I feel, all of us are driven by satisfaction and happiness
that we achieve through our acts and endeavours. We feel satisfied and
rate our life successful when we get to live our life on our own
terms. Celebrated journalist Christopher Morley too opines this.
Scottish playwright J. M. Barrie presents another picture when he
says: The secret of happiness is not in doing what one likes, but in
liking what one does. Let us also hear what the great Henry David
Thoreau has to offer: Happiness is like a butterfly. The more you
chase it, the more it eludes you. But if you turn your attention to
other things, it comes and sits softly on your shoulder. However, the
idea of happiness is a little different for the great optimist Anne
Frank, who believes in the power of sharing happiness emerging from a
happy self: Whoever is happy will make others happy too. Its vice
versa has also been approved: In seeking happiness for others, you
find it for yourself. An old Chinese proverb pronounces: If you want
happiness for an hour, take a nap. If you want happiness for a day, go
fishing. If you want happiness for a year, inherit a fortune. If you
want happiness for a lifetime, help someone else.
American President Franklin Roosevelt also feels that happiness lies
in the joy of achievement. While we understand that it is certainly
not about achieving fortune or material possessions, it is a state
that emanates from our attitude that lets us appreciate what we have,
instead of getting restless about what we don’t.
Let happiness and satisfaction softly touch all of us. Amen!
Best wishes
CA. G. Ramaswamy
President, ICAI
August 25, 2011
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