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 accountancy in India. During its more than sixty years of existence, the Institute has achieved recognition as a premier accounting body in the country for its contribution in the fields of education, professional development, maintenance of high accounting, auditing and ethical standards. The Institute 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. The total membership of the Institute is about 115,000 and over 250,000 students are pursuing the Chartered Accountancy course. Out of the total members, nearly 70% are in Practice. 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, Chairmen of banks, Chairmen & Managing Directors of reputed enterprises, Executive Directors of innumerable enterprises/organisations. The members of the Institute 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 4000 members residing abroad.
The affairs of the Institute 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 30 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 and 24 Non Standing Committees for carrying out the provisions of the CA Act. In terms of the Chartered Accountants Act, 1949, the President is the Chief Executive Authority of the Council. The Secretariat of the Institute is headed by the Secretary who is in-charge of the office of the Institute as its Executive Head. The activities of the Institute have been 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 the Institute are the, Disciplinary Cell, , Members and Students Services, International Affairs, Research, Auditing Practices, Accounting Standard Board, Expert Advisory Cell, Trade Laws & WTO, Insurance etc. The Institute has also set up ICAI Accounting Research Foundation under section 25 of the Companies Act.
The Institute 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. 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
The first step in this direction was the signing of a memorandum of understanding on April 26, 1998 with the newly formed Institute of Chartered Accountants of Nepal whereby the ICAI has provided technical and other support for the growth of the profession in Nepal.
Similar MOUs were also signed with the Ukranian Federation of Professional Accountants and Auditors, The Chamber of Audit of the Kyrgyz Republic and the Russian Board of Auditors.
The Institute has also entered into agreements with the Accounting bodies of Italy, Australia, China, Turkey, Israel, America, Canada for a reciprocal arrangement and technical support for the development of the professionals. The Institute has also signed Memorandum of Understandings with the accounting bodies in Pakistan, Sri Lanka and Bangladesh for professional collaboration and cooperation.
The Institute of Chartered Accountants in England & Wales (ICAEW), has allowed exemption in five out of six papers in the professional stage examination, to the members of ICAI. The CGA of Canada has granted advanced standing status for ICAI members and thus the ICAI members would need to appear effectively in five papers as against sixteen papers earlier. ICA Institute of Uganda allows its membership status to the ICAI members who are in good standing.
Functions of the Institute
The main functions of the Institute of the Chartered Accountants of India are prescribing qualifications for membership, holding examination 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. The Institute 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. It conducts research and brings out hand books and pamphlets 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. The Institute coordinates with Universities on shaping their accountancy curriculum linked with the Chartered Accountancy course. It also publishes a monthly journal titled "The Chartered Accountant".
In addition to regulating the profession, the Institute is a national standard setting body in India and the National Accounting Standards are given statutory recognition under various statutes. The Indian Accounting standards have almost been harmonised with the International Accounting standards. In addition, the ICAI also issues from time to time various Guidance notes, monographs, etc. for the guidance of its members on various new 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 30 AAS so far which meet the international benchmarks and expectations.
All statutory functions and many other important functions assigned to the Council by the Chartered Accountants Act, 1949 are administered by the Administration. Some of the functions are :-
- Engagement and training of articled/audit clerks
- Conducting examinations for candidates of the CA Courses
- Enrollment of eligible persons as members,
- Granting and refusal of Certificate of Practice to members,
- Exercise of disciplinary powers over members and students
- Removal of member names,
- Restoration of names,
- All matters related to personnel and their development,
- Maintaining liaison with the Govt., regulatory bodies, industries,
- Chambers of Commerce and professional bodies.
The Technical Directorate assists various Technical Committees of the Council of the Institute such as the Accounting Standards Board, Research Committee, Expert Advisory Committee and the like. In addition, it takes active part in the activities relating to development of the profession. This directorate engages itself in the preparation of technical drafts for consideration of their respective committees. Similarly such Committees are also required to revise/update the standards, guidelines, publications etc. wherever necessary. In a nutshell, this division looks after technical research and development activities in areas of Accounting, Auditing, Corporate & Fiscal Laws, Financial Management etc.
Board of Studies
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 Board also takes care of the revision of syllabi of the various courses periodically. It also oversees the performances of various Accredited Institutions which has been authorized to impart oral coaching to students.
Continuing Professional Education Directorate
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 in their respective fields. The Continuing Professional Education Directorate of the Institute assumes the responsibility of updating the members on professional issues arising out of new legislation, technological changes and latest pronouncements of the Institute 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. This directorate also looks after the activities related to certain Post Qualification Courses viz. Corporate Management Course, Management Accountancy Course and Tax Planning & Tax Management Course. The Institute now also offers Post Qualification courses in Information Systems Audit and Insurance, Risk Management and Trade Laws & WTO. The Institute also holds a programme on Computer Aided Auditing Techniques.
With effect from Jan 2003, the CPE has been made mandatory for members in practice who will have to gain specified number of CPE credit annually by undergoing approved learning activities. Some relaxation has been given to senior members. Efforts are on to bring the CPE requirements at par with the International Standards.
The Institute 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. The Institute not only entertains complaints from Stock Holder/User Group but also takes suo-moto action in cases which come to the knowledge of the Institute through external information. The provisions contained in the code of conduct of the institute are most stringent ones as comparing to any other in the world and the actions taken by the institute against the defaulting members are also very stringent. There are very few cases, where the Indian courts have taken more stringent action against the members than what is proposed by the institute.
The Institute 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 a Peer Review Board had been constituted in 2002. The first stage of implementation of the Peer Review mechanism commenced w.e.f. 1st April, 2003.
The Institute has constituted a Financial Reporting Review Panel who would suo-moto look 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 panel, the findings of panel would form the basis for initiating action under the disciplinary mechanism that would be in place.
ICAI's involvement in National Issues and Organizations
Within the country, the Institute is represented through its nominees on the important Committees of various Government organisations like Central Direct Tax Advisory Committee of Government of India (GOI); Reserve Bank of India Sub-Committee (Audit) of the Board for Financial Supervision; SEBI Primary Market Advisory Committee; SEBI Committee on Substantial Acquisition of Shares & Takeover Regulations; RBI's Informal Advisory Group on NBFC's; RBI's Group for Evaluating Internal Audit System in Banks
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 in respect of the following :
- Comptroller and Auditor General of India - provides 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.
- Department of Company Affairs - provides 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.
- Reserve Bank of India - provides technical advice and maintains constant touch in regard to matters pertaining to bank audits and audit of non-banking financial companies etc, Y2K issue etc.
- The Securities and Exchange Board of India - maintains constant touch and offers views/suggestions and also hold discussions in all matters touching upon the profession of Chartered Accountants.
- Central Board of Direct Taxes - actively associates in the process of formulation of budgets 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 Authorities - helps 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 the Institute 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, the Institute 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 with the Working Party on Professional Services (WPSS) of the World Trade Organisations (WTO).
The Institute of Chartered Accountants of India has a quite long standing and had celebrated its Golden jubilee in the year 1999. The scope of the services that a chartered accountant can provide is constantly increasing by way of enactments in the various statutes. The government as well as the public has shown greater level of confidence in the value-added services provided by the Indian chartered accountants. The Institute itself has the infrastructure both in terms of the hardware as well as human ware to handle any type of consulting assignment in the fields of institutional development, capacity building, developing accounting/auditing standards and drafting various acts and regulations. The Institute always participates in analysing various provisions in the national laws and submits its suggestions to government in that regard and at times, its suggestions are well accepted.
ICAI as a Virtual Institution
In the recent years the ICAI has grown in its size as well as in its operations. The Institute would soon become a virtual institution. e-Regulation is expected to be in place shortly. 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.