CA Institute to ink pact with UK accountancy body

The CA Institute will sign a mutual recognition agreement (MRA) with the UK-based Association of International Accountants (AIA) in Chennai on Friday.

The MRA will enable home-grown chartered accountants to acquire an additional qualification without having to write any separate exams, according to Mr G. Ramaswamy, President of the Institute of Chartered Accountants of India (ICAI).

Indian CAs, however will not get any practising rights, in the UK by virtue of this agreement.

AIA was founded in the UK in 1928 as a professional accountancy body. From conception, it has promoted the concept of ‘international accounting’ to create a global network of accountants in over 85 countries worldwide. AIA is recognised by the UK Government as a recognised qualifying body for statutory auditors under the Companies Act 2006.

Meanwhile, Mr Ramaswamy said that the planned MRA with New Zealand Institute of Chartered Accountants could be a reality in the next one month.

krsrivats@thehindu.co.in

SIEMENS-CIRCUMVENTING INTERNAL CONTROLS

FCPA COMPLIANCE: CIRCUMVENTING INTERNAL CONTROLS

By Deming, PLLC posted in FCPA on Monday, January 2, 2012

One of the most interesting aspects of the recent indictment involving a number of former Siemens officials are the charges relating to conspiring to circumvent Siemens' internal controls. Except in extreme cases such as the information filed against Siemens in 2008 where violations of the internal control provisions were alleged, the adequacy of internal controls under the internal controls provisions of the FCPA can seldom be expected to serve as a basis for a criminal violation.

This result is largely due to the esoteric nature of the FCPA's internal control provisions. As the court stated in Sec. & Exch. Comm'n v. World-Wide Coin Inv., Ltd., 567 F. Supp. 724, 751 (N.D. Ga. 1983), "[t]he main problem with the internal controls provision of the FCPA is that there are no specific standards by which to evaluate the sufficiency of controls; any evaluation is inevitably a highly subjective process in which knowledgeable individuals can arrive at totally different conclusions."

The information filed against Siemens in 2008, in effect, alleged a violation of the internal control provisions of the FCPA by knowingly failing to implement and circumventing a system of adequate internal controls.[1]  The recent indictment against the Siemens executives focuses on circumventing internal controls and makes no reference to implementing adequate internal controls.[2]

From a policy perspective, such a focus represents a positive development since it provides a mechanism for enforcement officials to direct their attention to individuals who actively seek to undermine an entity's efforts to deter improper conduct on the part of those acting on its behalf. From a trial standpoint, a challenge is presented in clearly establishing what controls the individuals charged sought to circumvent.

---

[1]United States v. Siemens Aktiengesellschaft, Case No. CR 08-367 B/L, Information at ¶ 135 (D.D.C., filed Dec. 12, 2008).

[2]United States v. Sharef, Case No. 1-11-cr-01056, Indictment at ¶ 57 (S.D.N.Y., filed Dec. 12, 2011).

Revised draft Bank Branch Auditors' Panel for the year 2011-12

We would like to inform that the revised draft Bank Branch Auditors' Panel for the year 2011-12 has been hosted at www.meficai.org and will be available till 10th January, 2012. In case of query, pl log a complaint at http://www.meficai.org/complaints/complaint_enrty_enter.jsp .

Next Study Circle Meeting on 08 01 2012

MALAD GOREGAON CPE STUDY CIRCLE

(W.l.R.C. OF THE INSTITUTE OF CHARTERED ACCOUNTANTS OF INDIA)

Address: A – 12, Vikas Bldg, Ramchandra Lane, Malad (West), Mumbai - 400064

Email: ghiatarun@rediffmail.com Cell – 09821345687, Tel: 28882022, 28885425

 

CONVENERS: -  JIGNESH SAVLA  Cell: 9820260070    KISHOR THAKRAR   Cell:  9324620343

 

CORE COMMITTEE: - R. C. Reshamwala, Tarun Ghia, Mahesh Mistri, Bharat Patel, Hiten  Shah, Ankit Kapadia, Utpal Patel, Mahesh Dave

The Next Study Circle Meeting will be held as per details given below:

Day and Date: Sunday 08^thJanuary, 2012.

Subjects :

1.      Professional opportunities in business laws, networking and how to expand practice.

2.      Gifts under section 56(2) of the Income Tax Act, 1961.

     

Speakers :

1.CA. Rajkumar Adukia

2. CA. Sunil Vankawala and CA. Subhash Chhajed

               

Venue :  Kandivali Recreation Club, Near S.V.P. School, Shantilal Modi Marg,

              Kandivali (West), Mumbai - 400067.
              

Timing of the Meeting:  9.30 a.m. to 01.00 p.m.

Meeting will commence exactly at 9.30 a.m.

CPE CREDIT THREE HOURS.

         You are requested to attend the Meeting and make it grand success with your active participation.

         Members who have not yet paid their membership fees are requested to bring their Membership Fees for FY 2011 – 12 along with Admission Form.

Non members would pay Rs.350/- for attending the meeting.

Yours truly

(JIGNESH SAVLA)                              (KISHOR THAKRAR)

Convener                                            Deputy Convener

--
CA , CPA Jignesh Savla
9820260070

Extension of CPT registration date upto 4th April, 2012

Last date for registration to Common Proficiency Course (CPC) is revised as 4^th April, 2012 in view of the public holiday on 5^th April, 2012 on account of “Mahavir Jayanti”.  Students, who register for CPC on or before 4^th April, 2012 are eligible to appear in the Common Proficiency Test (CPT) to be held in June, 2012.

More trouble for Vijay Sai from ICAI?

There's more trouble brewing for V Vijay Sai Reddy, who was recently arrested by the CBI, with the Institute of Chartered Accountants of India (ICAI) preparing ground to initiate proceedings against him. A chartered accountant and founder of audit firm V S Reddy Associates, Vijay Sai is being interrogated by the CBI for his alleged role in the illegal assets case of Kadapa MP Y S Jagan Mohan Reddy. Sources said the accountants regulator has already sent a missive to Vijay Sai seeking an explanation pertaining to allegations made by the CBI. "Though now there are only allegations of criminal conspiracy, we, however, have to determine if there's any professional misconduct. The institute has already written to him, but has given him time to respond since he is in the judicial custody," a disciplinary committee member of ICAI told Express. According to sources, ICAI is also verifying its records to determine if Vijay Sai, who assumed a fulltime role as vicechairman of Jagathi Publications, is continuing practice as a fulltime chartered accountant and signing financial statements of his clients. "Since he assumed a role in the daytoday management affairs of a company, Vijay Sai Reddy has to seek permission from the institute to continue signing of balance sheets of other companies on behalf of his audit firm only on a parttime basis. It's unclear if he sought such a permission," the source said.

Service tax input

I have come across one company where manufacturing, service and trading are taking place.

 

The manufacturing division is utilising the service tax input against their excise duty or service tax duty

 

Whereas both service and trading division are not utilising their input tax benefits

 

The trading division cannot utilise there is no output service

 

Whereas whether service division can utilise their input tax such as telephone bill, rent payment against its service tax payable.

 

The service division is also procuring lot of goods which can be used for repair, whether cenvat amount also taken into consideration against its service tax due. Some of the service division are attached with trading where we cannot take input credit. Wherever independent service division or workshop can avail input tax credit in the above company set up where all division are under single umbrella

National Convention for CA Students - Bangalore - UDAAN - FLY TO FUTURE

National Convention for CA Students - Bangalore

Saturday, 28th January, 2012 and Sunday, 29th January, 2012
Venue : Koramangala Indoor Stadium, 80 Ft. Road, Koramangala, Bangalore – 95.
Organised by : Board of Studies, ICAI, New Delhi
Hosted by : Bangalore Branch of SIRC of ICAI& Bangalore Branch of SICASA
Theme : “ U D A A N - fly to future”

Students are hereby requested to register for the convention at the earliest. The details for registration is as follows–
Registration Fees ` 400/- per Student
` 350/- per Student - { if Registered before 18.01.2012 }
Accommodation ` 150/- per Student

Payment Mode Cash/DD/Cheque To be drawn in favor of “Bangalore Branch of
SIRC of ICAI”, payable at Bangalore.
For Registration Queries Contact :
Ms. Rajalakshmi, Bangalore Branch of SIRC of ICAI, ICAI Bhawan, # 16/0, Millers Tank Bed Area, Vasanthanagar,
Bangalore – 560 052. Ph. + 91-80-30563509; 30563500. E-mails: bangalore@icai.org; blrsicasa@icai.org

Vacancy for CA in DBS Bank

DBS is a leading financial services group in Asia, with over 200 branches across 15 markets. Headquartered and listed in Singapore, DBS is a market leader in Singapore with over four million customers and also has a growing presence in the three key Asian axes of growth, namely, Greater China, Southeast Asia and South Asia. The bank's strong capital position, as well as "AA-" and "Aa1" credit ratings that are among the highest in the Asia-Pacific region, earned it Global Finance's "Safest Bank in Asia" accolade for three consecutive years, in 2009, 2010 and 2011.

Empanelment for Neelachal Bank

      NEELACHAL GRAMYA BANK

Last Date : 10/01/2012

Invited from interested CA firms for migration audit of neelchal gramya bank CBS system.

Address: NEELACHAL GRAMYA BANK Head Office, Kokila Residency, Ananta Vihar, Bhubaneswar-751020

http://www.neelachalbank.com/MIGRATION%20AUDIT.pdf

CA Data updation for 2012-13 at CAG website

CA link of CAG website

http://cagofindia.delhi.nic.in/caapplication/

I-T slaps ONLY Rs 135 crore tax demand notice on IAS couple

I-T slaps Rs 135 crore tax demand notice on IAS couple
PTI | 04:01 PM,Jan 04,2012
New Delhi, Dec 4 (PTI) The Income Tax department has slapped a Rs 135-crore demand notice on Madhya Pradesh cadre IAS couple Arvind and Tinu Joshi for alleged tax evasion. The department had conducted searches in Bhopal and other premises of the 1979-batch couple during the financial year 2009-10 and after scrutiny of their financial holdings and assets, a tax demand notice has been issued against them a few days back. "The notices have been issued to the IAS officials after their assessment was completed," a senior I-T officer said. Documents relating to investments of the couple, according to I-T department, have shown that they owned movable and immovable assets to the tune of Rs 360 crore. The I-T assessment order prepared by the Bhopal central range of the department, according to sources, has relied heavily on the properties, shares and other financial investments found in the name of the couple during the two-year probe. The I-T department had conducted searches on the couple's residence in February 2010 which yielded Rs three crore in cash following which the officials were suspended. Both Arvind and Tinu have held important positions in the Centre since the late 80s. Tinu served as Deputy Secretary in the PMO from July 1, 1988 to January 1, 1990 while Arvind was Joint Secretary in the Defence Ministry during the 1999 Kargil conflict. PTI NES

Auditor disowns Prithvi Information report; refuses to sign accounts

Auditor disowns Prithvi Information report; refuses to sign accounts


January, 04th 2012
The auditor of the Hyderabad based software outsourcer Prithvi Information Solutions (PISL) have refused to sign the financial accounts of the company for 2010-11.

According to a copy of the minutes of the annual general meeting (AGM) seen by ET and also filed by the company with BSE, VK Asthana & Co, the auditors have disowned the audit report and financials circulated by the management, making it clear that they did not sign the audit report and financials.

This comes just about a week before the company's meeting convened to obtain shareholders' approval for the 2010-11 accounts. The auditors said they did not sign the audit report and financials since the board meeting held for the purpose "was inconclusive and the audit has not been completed."

The PISL managing director V Satish Kumar admitted that the audit report and financials were only "initialed by the audit firm and not signed. But it is as good as signed. From a legal point of view, I don't have anything to worry about."

In an interview with ET on Tuesday, he said it is a normal practice for the auditors to go back to their offices after the audit committee meetings, sign the audit report and financials and send them across to the company in a couple of days after the audit committee meetings. "In our case, we consider it deemed signed once the auditors gave the initialed draft audit report."

Raising objections to the management's decision to go ahead with circulating the audit report and financials without its signature, the audit firm has submitted its resignation letter to the PISL management.

Interestingly, VK Asthana is the fifth auditing firm the company had in the last three years after Patwari & Co, Ernst & Young, PriceWaterhouseCoopers and Walker Chandiok.

Prithvi said it changed Ernst & Young in March 2009 because PriceWaterhouseCoopers had more experience in auditing IT firms. PwC dropped out in 2009 following the multi-crore accounting fraud at Satyam Computer Services. Walker Chandiok, the third auditor appointed soon after in July 2009, resigned without completing the audit in January 2010. According to Prithvi, Walker Chandiok was not able to audit its books in the time available and so the IT firm had hired VK Asthana & Co soon after.

Despite VK Asthana disowning the audit report and financials for 2010-11 and resigning while raising serious objections, the management went ahead with conducting the AGM and also adopted the accounts.

Satish Kumar said the auditor has initially agreed that the company can hold audit and board meetings for finalisation of accounts and also for issuing notices to shareholders for the AGM, but disowned his earlier stand, commitments and assurances.

 
Further, he said the company has obtained legal advice on the matter from the former chairman of the Company Law Board, S Balasubrahmanian, and senior advocate Challa Kodandaram. Both the legal experts have advised the management to go ahead with placing the unsigned accounts before the shareholders for adoption.

Satish Kumar said the auditors, while resigning, have "made several infructuous, irrelevant, false, baseless and unwarranted statements/allegations," on the management, but he refused to disclose the exact allegations levelled by the audit firm.

Further, he said, "The company was completely perplexed that the auditor having consented to all the decisions of the board like fixing the date of AGM, sending notices for the AGM and also intimating the stock exchanges, etc, and having assured that he would furnish to the company his final signed audit report within a few days, should have abdicated his entire role and responsibility, and thus creating an unusual situation for the company."

ET, which has perused a copy of the AGM minutes that describe the events and objections of the auditors, however, could not reach the audit firm for its comments for this story.

When contacted, the president of the Institute of Chartered Accountants of India (ICAI), G Ramaswamy, said such a practice of adopting the unsigned accounts "is not legally tenable."

On the cheating cases against the company, Satish Kumar said the company has settled the case with HSBC, and the AP High Court on Monday dismissed the winding-up petition filed by Deutsche Bank. With regards to a case filed by Sojitz Corp claiming Rs 290 crore, the company is negotiating a settlement for Rs 180 crore, he said.

On Tuesday, the PISL stock gained 8.22% at Rs 11.85 on BSE, whose benchmark Sensex lost 96 points to close at 15,873 points.

 
The empowered committee had considered a revised concept paper in its last meeting on 28 November 2011 and decided that states officials for taxation should examine it. Some transactions are being considered services by the Central government, in fact, these are considered goods or luxury or entertainment by some state governments, too. As a result taxation of such activities may not provide any additional tax-base to states as proposed in GST, it is mere encroachment into taxation fields assigned to states by the Constitution, he further added. The states are likely to raise objections under certain activities which are under state tax domain but, subject to levy of service tax by the Union government.

 
These are transport of goods by road, through inland waterways, steamer agents, rent-a-cab operator. Secondly, personal services like beauty parlours, health and fitness centers, dry-cleaning, outdoor caterers, pandal and shamiyana services, membership of clubs and associations, services of providing accommodation in hotels, inns, clubs, guesthouses; etc. Thirdly, land buildings, construction services related to commercial or industrial buildings, residential complexes, services provided by builders in relation to preferential location, internal development, work contract service.

Fouthly, advertisement, promotion, marketing or organising of games of chance (including lottery, etc), sale of space for advertisement, cable operators, advertisement agencies, broadcasting of entertainment agencies and broadcasting of programmes.

Lastly, sale of goods, services of air-conditioned restaurant having license to service alcoholic beverages in relation to service of food or beverages, lease of goods, right to use immovable property, construction of complexes, building, civil structure or a part thereof including a complex or building intended for sale of buyer, wholly or partly, etc.

ICAI MEMBERSHIP RESTORATION AMNESTY

ICAI MEMBERSHIP RESTORATION AMNESTY25403announ15105.pdf

Vacancy for CA in Bank of America

Upto Assistant Vice President, Auditor I or II, Corporate Audit : MUM01962

Mumbai, India

Overview Bank of America is one of the world's largest financial institutions, serving individual consumers, small and middle market businesses and large corporations with a full range of banking, investing, asset management and other financial and risk-management products and services. The company provides unmatched convenience in the United States, serving more than 59 million consumer and small business relationships with more than 6,100 retail banking offices, nearly 18,700 ATMs and award-winning online banking with nearly 29 million active users. Following the acquisition of Merrill Lynch on January 1, 2009, Bank of America is among the world's leading wealth management companies and is a global leader in corporate and investment banking and trading across a broad range of asset classes serving corporations, governments, institutions and individuals around the world. Bank of America offers industry-leading support to more than 4 million small business owners through a suite of innovative, easy-to-use online products and services. The company serves clients in more than 150 countries. Bank of America Corporation stock is a component of the Dow Jones Industrial Average and is listed on the New York Stock Exchange. Responsibilities   -To participate in Corporate Audit activities within Asia Pacific Global Banking and Markets (GBAM), including Equities and Fixed Income, Corporate Banking, Trade Finance and Cash Management activities. Key tasks include: - Executing individual risk-based audits and reviews, including planning, process mapping, fieldwork and reporting, under the guidance from senior Corporate Audit associates. - Identifying and evaluating impact of key control deficiencies during audits and reviews to drive actionable business impact and influence management on sufficiency of corrective actions. - Maintenance of key client relationships. Requirements   Work experience between three to five years. Experience in reputable international banks, other financial institutions or Big Four is preferred.

Vacancy for CA in Deloitte

Location: Gurgaon, Haryana, India
Firm Service: Audit

Reference Code: 54637

Type of Position: Full-time

Job Description

Working in the statutory audit division the candidate would be expected to lead the field team in performing the statutory audit and report to the manager concerned. The clientele would be across a gamut of industries including manufacturing, telecom, software, media, FMCG etc.

Next Study Circle Meeting on 08 01 2012

MALAD GOREGAON CPE STUDY CIRCLE

(W.l.R.C. OF THE INSTITUTE OF CHARTERED ACCOUNTANTS OF INDIA)

Address: A – 12, Vikas Bldg, Ramchandra Lane, Malad (West), Mumbai - 400064

Email: ghiatarun@rediffmail.com Cell – 09821345687, Tel: 28882022, 28885425

 

CONVENERS: -  JIGNESH SAVLA  Cell: 9820260070    KISHOR THAKRAR   Cell:  9324620343

 

CORE COMMITTEE: - R. C. Reshamwala, Tarun Ghia, Mahesh Mistri, Bharat Patel, Hiten  Shah, Ankit Kapadia, Utpal Patel, Mahesh Dave

The Next Study Circle Meeting will be held as per details given below:

Day and Date: Sunday 08^thJanuary, 2012.

Subjects :

1.      Professional opportunities in business laws, networking and how to expand practice.

2.      Gifts under section 56(2) of the Income Tax Act, 1961.

     

Speakers :

1.CA. Rajkumar Adukia

2. CA. Sunil Vankawala and CA. Subhash Chhajed

               

Venue :  Kandivali Recreation Club, Near S.V.P. School, Shantilal Modi Marg,

              Kandivali (West), Mumbai - 400067.
              

Timing of the Meeting:  9.30 a.m. to 01.00 p.m.

Meeting will commence exactly at 9.30 a.m.

CPE CREDIT THREE HOURS.

         You are requested to attend the Meeting and make it grand success with your active participation.

         Members who have not yet paid their membership fees are requested to bring their Membership Fees for FY 2011 – 12 along with Admission Form.

Non members would pay Rs.350/- for attending the meeting.

Yours truly

(JIGNESH SAVLA)                              (KISHOR THAKRAR)

Convener                                            Deputy Convener

--
CA , CPA Jignesh Savla
9820260070

Important notice on Digital Certificates( SHA2)

Important notice on Digital Certificates( SHA2)

If in case you are using Digital Certificate issued post 1st January 2012 (SHA2 Certificate ),please ensure that you have Windows XP ( SP3 )/ Windows Vista/Windows 7 installed.

Audit regulators have handed out another blistering Big 4 inspection report

Audit regulators have handed out another blistering Big 4 inspection report, this time to Deloitte & Touche, calling out double the number of audit problems from the prior year.

The Public Company Accounting Oversight Board published its 2010 inspection report for Deloitte, finding fault with 45 percent, or 26 of the 58 audits reviewed. In the year before, the board pointed out problems with 22 percent, or 16 of 73 audits that were scrutinized. The board recently issued similar findings for PwC and KPMG in those firms' 2010 inspection reports. The audit problem rate jumped from 12 percent to 39 percent for PwC, and from 13 percent to 23 percent for KPMG it the same time frame.

In Deloitte's case, the PCAOB said it found failures to identify or properly address financial misstatements, including failures to comply with disclosure requirements. It also found failures to perform necessary audit procedures, including one instance that led to a change in the public company client's accounting. Some of the problems were so significant, the PCAOB said, that it appeared the firm did not obtain the evidence it needed to support the opinion it issued on the financial statements or the effectiveness of internal control over financial reporting.

That unflattering report follows a separate report in October where the PCAOB pointed out problems with Deloitte's audit quality control dating back to 2007. The board normally keeps such criticisms private and gives firms a year to resolve them before making those concerns public.

In October, however, the board updated a 2008 inspection report with concerns that the overall design of Deloitte's audit methodology and policies is problematic. The firm doesn't show enough skepticism, too easily accepting management's word on accounting matters and areas of judgment, the board said. The report also raised concerns about audit supervision, internal enforcement of existing policies and procedures, the quality of the firm's internal training programs, and the internal consultation process on tough audit issues.

In a letter accompanying the recent inspection report, Deloitte says it has evaluated the issues raised by the inspection team and taken appropriate actions. "We are committed to continuing to work with the PCAOB to further strengthen trust in the integrity of the independent audit," the firm wrote. Firm spokesman Jonathan Gandal said Deloitte has been making investments in strengthening and improving the practice.

BALANCE SHEET IRRELEVANT FOR INVESTORS???

With accounting standards that keep changing from hour to hour, the
balance sheets become irrelevant pieces of garbage. Yes, you will have
statutory compliance, but the investor is thoroughly misled

There is wonderful news for companies that are sitting on liabilities
in foreign currency. The corporate affairs ministry has put its foot
in the domain of the guild called the Institute of Chartered
Accountants of India (ICAI) and said that these liabilities can be
ignored from the accounting statements till 2020. Effectively, losses
on foreign exchange can be taken directly to the balance sheet,
without going through the profit and loss account!

This is very much like the ministry of health changing the name of a
terminal disease from, say, cancer, to a minor disorder like ‘fever’.
Everyone should be happy.

It is amazing how the government comes in to fool the investing
public. The Reserve Bank of India (RBI) comes in and relaxes norms
relating to recognition of bad debts. It permits banks to ‘reschedule’
loans so that they do not have to reduce their profits on account of
doubtful loans. And the stupid banks will report ‘higher’ profits and
pay taxes on it too! And the brokerages will come out with research
reports that will end up comparing apples with tomatoes.

The length to which the government bodies connive with industry bodies
to hide things from investors is amazing. And the body called ICAI
just keeps it mouth shut.

Now, the accounting standards are supposed to be the sole domain of
the ICAI. If the RBI or the corporate affairs ministry permits laxity
in accounting norms, should the former toe the line? Is it not the job
of the ICAI to qualify the accounts and quantify precisely the impact
on the bottomline due to changes brought about by some fiat issued by
a third party? If they do not do this, they are not being true to
their profession and the investors have a right to seek explanations
from the auditors. The auditors should simply ignore the change in
reporting standards permitted by some unrelated entities and expose
the scam for what it is.

It is no wonder that Indian equities are viewed with suspicion. With
accounting standards that keep changing from hour to hour, the balance
sheets become irrelevant pieces of garbage. Yes, you will have
statutory compliance, but the investor is thoroughly misled.

In case, the rupee gains and there are exchange profits, will the
companies stop reporting these? Why are rules and norms being designed
to simply pretend that things are fine when they are not? There seems
to be a concerted effort between various government agencies and the
industry associations to fool the investing public at large. And in
this, bodies like the ICAI have become a ‘handmaiden’, who does not
care about the fact that it owes legal allegiance to the shareholders
and not to the promoters.

The end result would be financial results that are boosted by heavy
doses of ‘steroid’ and even the analyst body would not do anything
about this. The promoters will use these fairy-tale accounts to raise
more money from the public and the banking system. The banking system
will in turn use these fairy-tale customers to boost their numbers and
fool the public.

It is best to avoid all companies with any kind of foreign exchange
liabilities. One simply does not know whether the company is already
bust or just bluffing.

ICAI BANGALORE JANUARY 2012 NEWSLETTER

January.pdficai

Wanted CA

A well established firm is looking for a CA for partnership.

If interested, please reply at centex131@gmail.com with your terms & conditions.

CA. Chiranjiv SodhiB.Com, FCA, DISA(ICA)

Digital Signature update Wef 01-01-2012 SHA2 Certificate Require WIN SP 3

Important notice on Digital Certificates( SHA2)

If in case you are using Digital Certificate issued post 1st January 2012 (SHA2 Certificate ),please ensure that you have Windows XP ( SP3 )/ Windows Vista/Windows 7 installed.

http://mca.gov.in/MCA21/digi_cirti-2012.html

Forthcoming seminar of Panipat branch

Date	07.01.2012
Day	Saturday
Time	05.00 pm to 9.00 pm
Venue	Hotel Niurla’s, G.T.Road, Panipat
Special Attractions	·        Chief Guest: Sh. Yash Pal Singal, IPS      Hon’ble  Additional Director General of                                                               Police (CID) Haryana    ·        Guest of Honour: Sh. Pankaj Nain, IPS       Hon’ble  Superintendent of  Police, Panipat           And other officers from Police Department, Panipat
Speakers/Topics	Speakers : 1) CA N. D. Gupta                        Past President, ICAI New Delhi                         2) CA Aashish Makhija, New Delhi   Topic:    : “ Role of Chartered Accountants in Prevention                     Of Economic Offences”
CPE Hours	4 (Four) Hours CPE credit
Fee	1. Free for corporate members 2) For other members, FCA Rs 500/-,  ACA Rs 400/-

 

Notes: 1)  Programme will be followed by Dinner.

             2)   Please join the programme with your queries.

           3)  Three punctuality prizes up-to 05.15 pm

 

CA. Chiranjiv Sodhi

Handbook on Companies Bill-2011

hbcb2011.doc

Revised Schedule VI Workshop

Revised Schedule VI Workshop

by KGMA, Delhi

Workshop Coverage:

·        MCA Notification on applicability of Revised Schedule VI;

·        Features of Revised Schedule VI;

·        Issues and Resolutions under Revised Schedule VI:

1.     Comparatives under Revised Schedule VI;

2.     Bifurcation into Current and Non-current category;

3.     Multiple Business and Concept of Operating Cycle under Revised Schedule VI;

4.     Sundry Debtors under Revised Schedule VI;

5.     Treatment of Equity Shares, Preference Shares and Share Application money;

6.     Proposed Dividends;

7.     Miscellaneous Expenditure, and much more

·        CARO and Revised Schedule VI

·        CD on Revised Schedule VI including MS Excel Template for Revised Schedule VI

Notes:

(i)          The fees for this Workshop is Rs. 750/= (including cost of Background Material, CD and Refreshments) per participant;

(ii)       The fees shall be payable through Cheque/ DD drawn in favour of KG Management Advisors LLP;

(iii)     The fees can be paid either by sending Courier/ Speed Post/ Online Transfer

(iv)     For cash payment of fees contact at 9953590104, 9899954015

 

Venue: Shah Auditorium, Civil Lines (Near Kashmere Gate Metro Station), Delhi 110006

Schedule: Saturday, February 11^th, 2012 from 10.00 am to 2.00 pm

Speakers: FCA Kamal Garg, Delhi

Contact: 09953590104, 09899954015

Email: llp.kgma@gmail.com, admin@kgma.in

URL: www.kgma.in

Last Date of Registration: February 5^th, 2012

 

Seats are limited, enrolment for the Workshop is accepted on First-Come-First-Serve basis

Extension of last date for compliance of CPE hours requirement for Members holding COP

---

FOR INFORMATION OF THE MEMBERS

Subject: Extension of last date for complying with the CPE hours requirement for the calendar year 2011 for the members holding COP from 31st December, 2011 to 31st March, 2012 This is for kind information of the members that the Council of the Institute has decided to extend the last date for complying with the CPE hours requirement for the calendar year 2011 for the members holding COP by three months, i.e., upto 31st March, 2012. Secretary CPE Committee of ICAI

ICAI warns against misuse of question papers, suggested answers, revisionary test papers, supplementary study material, result etc pertaining to CA examination

ICAI warns against misuse of question papers, suggested answers, revisionary test papers, supplementary study material, result etc pertaining to CA examination
Sunday, January 1, 2012, 14:04CA CS ICWANews





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Refund of service tax to exporters through the Indian Customs EDI System (ICES)

Refund of service tax to exporters through the Indian Customs EDI System (ICES) - Schedule of Rates and application form for claiming the refund notified

A simplified scheme for electronic refunds of service tax to exporters vide has been introduced by the CBEC vide Circular No. 149/18/2011-ST dated 16.12.2011 on the lines of duty drawback.  In the new scheme, exporters will have to either opt for electronic refund through ICES system, which is based on the 'schedule of rates' or go for refund on the basis of documents, by approaching the Central Excise/Service Tax formations.

Exemption to transport of goods by the Government railways extended

·         Exemption to transport of goods by the Government railways extended till March, 2012

Service tax levy on transport of goods by the Government railways and transport of goods by rail otherwise than in containers has been further postponed by three months.  Now the levy would be applicable from April, 2012 instead of January, 2012 which was proposed earlier.

CONCEALMENT PENALTY

Concealment and penaltyV. K. SUBRAMANI Share  ·   print   ·   T+
The very purpose of filing tax returns is to record the legal
compliance by taxpayers. At times, administrators resort to verifying
the correctness of the return which is technically called as
‘assessment'. Per se, necessary and relevant details are called for
and the tax officers pass their judgments on the returns filed by the
taxpayers. It is more often than not, that the litigations start upon
such assessment and there would be no fanfare if the returns filed are
accepted passively on their face value by the department.
In assessment, the tax officers add entire purchases as unproved
purchases without applying logical reasoning that there could not be a
sale without a preceding purchase. The purchase at the most might be
inflated in order to deflate the profit for tax purposes but entire
purchases could never be treated as bogus when the subsequent sale is
taken as genuine.
There could be innumerable instances for enhancing the income
chargeable to tax or reducing the loss where the return depicts
negative income. One such addition which goes to increase the taxable
income is trading addition which means the operating results prima
facie are correct but the tax officer is not happy with the income
admitted or the taxpayer is not able to give reasons as to why the
income from the regular business activity is low or reduced from the
preceding year or years tax return.
Yet another addition to the taxable income of a taxpayer might arise
from credits shown by way of borrowal which are negatived by the tax
officers. When tax officers seek confirmation of the amount borrowed
and the taxpayer or the lender had not given adequate information or
explanation about the genuineness of the loan or lending, it could be
treated as the deemed income of the taxpayer. Unexplained credits
In Grover Fabrics India (P) Ltd's case (ITA No.860 of 2008 dated
November 4, 2009) the taxpayer was subjected to twin additions viz.
addition towards trading results and unexplained credit entries in the
books of account. In first appeal, the trading addition was deleted by
reasoning that the unexplained credit entries when taxed as income it
goes to increase the trading income and a separate addition towards
trading results was hence held as unwarranted.
Nexus theory
The taxpayer argued that when trading additions were deleted the
unexplained credit entries too would be automatically deleted. But the
court held that merely because trading additions were found to be
unsustainable it does not mean that unexplained credit entries have to
be excluded for tax assessment.
The court held that the unexplained credit entries may or may not have
nexus to the trading results. Where the trading additions are
sustained it might shield the addition towards credit entries but the
reverse may not be possible. When credit entries are added still the
trading results may also be subjected to upward revision.
When trading additions are made it is possible that the credits
appearing could be telescoped to those trading additions. Where such
addition is made in the earlier year if such telescoping is resorted
to in the later year the taxpayer could be subjected to concealment
penalty on the reasoning that the trading additions were the result of
conscious concealment of income and the act of subsequent cash credits
confirm the deliberate suppression of income earlier.
V. K. SUBRAMANI
(This article was published in the Business Line print edition dated
January 2, 2012

DTC

Budget and the DTCT.C.A.RAMANUJAM Share  ·   print   ·   T+
T.C.A.RAMANUJAM Great expectations were roused among assesses,
auditors and advocates when the Direct Tax Code (DTC) was brought on
the anvil in the place of the half a century old Income Tax Act, 1961.
The then Finance Minister thought that the Code will herald a fiscal
revolution and advised the public to ignore the old Act and read only
the DTC.
The euphoria generated by the introduction of the DTC in Parliament
can be attributed to the way the draft Code prepared the taxpayer for
a certain degree of stability in tax rates and slabs. All rates of
taxes were proposed to be prescribed in the Schedule to the Code
itself obviating the need for an annual Finance Bill. The initial slab
was fixed at 10 per cent of the income between Rs 1,60,000 and Rs
10,00,000, the next slab of 20 per cent on incomes up to Rs 25,00,000
and the final slab of 30 per cent on income above Rs 25 lakh for
individuals.
For companies the rate was indicated at 25 per cent. These slabs were
definitely liberal by any standard. It would have certainly led to
loss of Revenue.
Slabs and Rates
The DTC is meant to come into effect from April 1, 2012. Finance Act,
2011 modified the slabs and revised the same as Rs 1,90,000 to Rs
5,00,000 (10 per cent), Rs 5 lakh to Rs 8 lakh 20 per cent and Rs 8
lakh and above 30 per cent. No announcement was made about the fate of
the slabs and rates prescribed in the DTC and no assurance was given
that they will prevail with effect from April 1, 2012.
Analysts were left to infer that Government was having second thoughts
on the liberal slabs laid down in the DTC. Budget 2012 will be
presented on February 29, 2012. It will tell us about the future of
the DTC. But Mr Pranab Mukherjee can usher in the golden era for the
taxpaying public.
He can achieve the object of laying down permanent slabs discarding
the procedures followed hitherto and also discarding the method of the
DTC. The most worrying concern of the taxpaying public in India today
relates to the impact of inflation.
The Reserve Bank of India raised the bank rates 13 times. Inflation
has not come down substantially. Consumer price inflation is around 8
per cent. The GDP deflator measures inflation in the domestic economy
and the average inflation rate between 1969 and 2010 is indicated as
7.99 per cent.
Since the average rate of inflation is around 8 per cent to 9 per
cent, it stands to reason that the tax slabs should be adjusted on a
permanent basis to the rate of inflation in the economy. This is what
Dr Manmohan Singh did with reference to taxation of capital gains. He
introduced the concept of cost inflation index in 1992.
cost inflation index
Two decades have gone by and the system is working efficiently and
effectively in the field of capital gains taxation. The present FM
should take a leaf out of the then FM's book and introduce the cost
inflation index for fixing the slabs. This will obviate the need for
revising the slabs on an ad hoc basis.
The slabs will be automatically indexed without any room for
arbitrariness. Nobody can complain on the ground that inflation is
impeding their incomes. This one revolutionary piece of legislation
will earn for Mr Pranab Mukherjee a permanent place in the fiscal
history of India. He will also earn the gratitude of the taxpaying
public in the 150 {+t} {+h} year of the income tax legislation.
In the budget of 2011, the FM has gone beyond the DTC and conferred
benefit on those with incomes below Rs 5 lakh. These persons need not
file their returns of income. The newly introduced Section 139 (1C)
refers to any class of cases to be notified for this purpose. This was
not thought of by the framers of the DTC.
It released the bulk of the salaried taxpayers from the legal
obligation to file tax returns. It reduced the work load of Senior
Officers and enhanced their productivity.
The same way, the FM can travel beyond the contours of the DTC and
rope in all peddlers in black money and in money laundering.
Government has tabled the Prevention of Money Laundering (Amendment)
Bill in 2011 in Parliament seeking to introduce the concept of a
‘corresponding law' to link the provisions of Indian law to those of
other countries and to provide for transfer of proceeds of crime
committed in any manner in India.
The Bill enlarges the definition of money laundering to include
concealment, acquisition, possession and use of proceeds of crime as
criminal activities and to remove the existing limit of Rs 5,00,000 in
fine.
The question that arises is whether tax evasion will fall in the
category of money laundering crimes. A clarificatory amendment in the
Bill will obviate all doubts and send the fear of the taxman to those
holding secret accounts in foreign banks.


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Introducing the cost inflation index for fixing the tax slabs will
obviate the need for revising them on an ad hoc basis.

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(This article was published in the Business Line print edition dated
January 2, 2012)

PEER REVIEW

Peer review for chartered accountantsM. V. Kali Prasad Share  ·
print   ·   T+   The Institute of Chartered Accountants of India
(ICAI) has taken it upon itself to ensure the quality of the working
of its members through peer review. Peer review is review of the
professional competence of one chartered accountant by another. Such
an exercise ensures that the members of the institute comply with the
requirements of the profession and that the quality of services
rendered doesn't fall below the expected quality. The ICAI selects
from senior members with a standing of more than 10 years to function
as peer reviewers. The peer reviewers (PR) scrutinise the records of
the practising unit (PU) and send the report to the Institute.
STEPS INVOLVED
Peer review can be voluntary by the firms, or initiated by the ICAI.
PU is given a choice to select the reviewer from among three names
recommended by the ICAI. It is the ICAI which appoints the PR, as
preferred by the PU. The ICAI sends in letters of appointment to both
the PR and the PU. Either of them can contact the other person to
commence the PR. The ICAI sends a questionnaire to the PU regarding
various aspects to be covered by the PR. The completed questionnaire
is forwarded to the PR, which sets the procedure in motion.
Every PU maintains records of their own firm, such as attendance
registers, training modules, standardised formats of communications,
templates for audit programmes, etc., apart from the permanent file
and current file of the clients. PR reviews the files of the firm as
well as of the clients.
Depending upon the size of the firm, the PR selects a few clients and
carries out his review procedures on them. He also reviews the files
of the PU on their own functioning and administration. Based on his
findings, the PR releases a preliminary report, indicating the
shortfalls as noted by him, and suggesting improvements on the
administration of the firm, as well as the quality of the work carried
out by the firm.
The PU is given guidelines to set right the shortcomings and to
improve upon the documentation and procedures to be adopted. Once the
PU informs that the shortcomings are taken care of, the PR carries out
a second review and releases his final report to the ICAI. The
committee of the ICAI reviews all the procedures adopted by the PR and
the PU, and, if satisfied, issues a certificate to the PU on
completion of the peer review.
WORKING OF THE PU
Before the commencement of the audit: Whether the PU considered the
element of independence of the auditor before accepting an assignment,
self-regulatory measures, correspondence with the outgoing auditor,
issue of letter of acceptance and the letter of engagement, if the
assignment is within the limits specified for the number of audits,
disqualifications under the provisions of law, etc.
At the planning stage: Evaluation of internal controls, basis of
determining the audit risk, basis for the extent of check to be
carried out, whether to carry out the audit on a continuous basis or
year-end basis, ascertaining any changes in accounting policies,
changes in law, changes in the organisational structure, etc.
During the course of the audit: Selection of audit staff, planning for
the work, critical areas, planning for transactions of a non-routine
nature, such as issue of shares, redemption of debentures, preference
shares, opening of new branches or new lines of activity. Monitoring
the progress of work, basis for accepting or rejecting the audit
evidence, basis on which any matter is to be referred to an expert,
selection of the expert, audit communications, minutes of meetings
with the management of the Company, compliance procedures, such as
compliance with the Accounting standards, requirements of law such as
TDS, service tax, central excise, VAT, etc.
Upon completion of the audit: Whether or not the working papers were
independently reviewed by the partner signing the audit report,
clarifications sought, basis of forming the opinion, coverage of the
aspects referred to in the terms of reference, etc.

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Peer review ensures that chartered accountants comply with the
requirements of the profession and that quality is maintained.

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(This article was published in the Business Line print edition dated
January 2, 2012)

AUDITORS-ACCOUNTABLE

Making auditors more accountableMOHAN R. LAVI Share  ·   print   ·
T+   According to the Companies Bill, the auditor is expected to
report on any qualification, reservation or adverse remark relating to
the maintenance of accounts.
January 1, 2012:   Warren Buffet said “Risk comes from not knowing
what you are doing”. Auditors, who can lay claim to being in one of
the riskiest professions around now, may not agree with the Sage of
Omaha since they would invariably believe that they know exactly what
they are doing when they sign-off on the financial statements of the
auditee.
However, the pursuit of profits by a business many a time involves
entering into complicated arrangements which the auditor may not be
privy to or which would be documented in so much detail that the
essence of the transaction is obliterated.
Pluri Cell E Pluri Cell E is in the news for its complicated chain of
transactions ultimately benefiting the Reliance Group – masquerading
as a French couple in the documentation. The Financial Services
Authority (FSA) in the United Kingdom focused on the happenings at
investment banks and their tendency to cross the line between
disclosure and deception at will.
The Securities and Exchange Board of India (SEBI) was conducting its
own investigations into the round-tripping of Indian funds through
investment vehicles abroad that traded in participatory notes and
other derivatives.
The Reliance Group requested for a consent agreement which SEBI agreed
to on January 14, 2011 for an amount of Rs 50 crore. The consent order
barred the defaulting companies and the implicated individuals from
making investments in listed securities in the secondary market
restricted participation in the markets.
But one of the most critical conditions mentioned in the consent order
was that the Reliance Group implement a policy of rotation of the
statutory auditors and therefore the statutory auditors for the year
2009-10 shall not be appointed for a period of three years commencing
from 2010-11. Without saying it in as many terms, SEBI appears to have
found the auditors' responsible for not reporting the round-tripping.
Companies Bill 2011 The Companies Bill 2011 agrees with SEBI. Apart
from rotation of auditors over half a decade or a decade, depending on
the constitution of the auditor, the Bill adds a few more clauses on
the responsibilities of the auditor. He is expected to report on any
qualification, reservation or adverse remark relating to the
maintenance of accounts and other matters connected therewith and
whether the company has adequate internal financial controls system in
place and the operating effectiveness of such controls.
Other matters connected therewith can include anything and everything
a company deals with and can land the auditor in trouble since he is
expected to play God and know everything in every rule-book applicable
to the company and if the company has followed them. SEBI charged
Reliance with violating the SEBI Act, 1992, the SEBI (Prohibition of
Fraudulent and Unfair Trade Practices Relating to Securities Market)
Regulations, 2003 and the SEBI (Foreign Institutional Investors)
Regulations, 1995.
While it is expected that the auditor should know these rules,
detecting non-compliance in a web of cross-holdings could prove to be
tough. Reporting on internal controls is a direct import from the
Sarbanes Oxley Act and does give power to the auditor to say it as it
is.
A residual clause specifies that any other matter can also be
prescribed to be reported. The Bill further empowers the auditor of a
company who- in the course of the performance of his duties as
auditor- has reason to believe that an offence involving fraud is
being or has been committed against the company by officers or
employees of the company, to report the matter to the Central
Government within such time and in such manner as may be prescribed- a
sort of a whistle-blowing mechanism for the auditors.
Risk-reward ratio The provisions in the Companies Bill, 2011 follow
the draft recommendations of the Barnier Report in the European Union
though the latter focuses on joint audits too apart from mandatory
rotation of auditors. As risks and rewards generally go together, the
audit community would expect to be adequately rewarded for their work.
This would be all the more pertinent now since in case they are found
guilty of negligence, the reward is to be returned in addition to
monetary and other liabilities.
The risk-reward ratio would be all the more relevant in the audit of
Government companies where the auditors have an additional
responsibility - facing off with the team from the Comptroller and
Auditor General of India (CAG).
(The author is a Bangalore-based chartered accountant.)