CPT CA final results

Final Examination and  CPT) held in November/December, 2014 are likely to be declared on Monday, the 19th January, 2015 around 2.00 PM.

Exposure Draft of Ind AS compliant Schedule III to the Companies Act 2013 for Public comments

ICAI has issued Exposure Draft of Ind AS compliant Schedule III to the Companies Act 2013 for Public comments.

Schedule III will be the presentation format for companies under IFRS-converged Ind ASs. Last date for comment submission is January 17, 2015. Now u can acess the ED and can submit the comment online at the following link:

http://www.icai.org/comments/asb/viewdetailcomment.html?commentdoc_id=11

Extension of last date “for complying with the CPE hours requirement for the Calendar Year 2014

We would like to inform you that it has been decided to extend the last date for complying with the CPE hours requirement for the Calendar Year 2014 - from 31st December, 2014 to 31st March, 2015

Chairman
CPE Committee

Road Map Revised for Implementation of Indian Accounting Standards

Road Map Revised for Implementation of Indian Accounting Standards for Companies Other Than Banking Companies, Insurance Companies and NBFCs; Notification to Follow Soon

In pursuance of the Budget statement, the Ministry of Corporate Affairs, Government of India after wide consultations with various stakeholders and regulators, has drawn-up a revised Road Map for companies other than Banking Companies, Insurance Companies and Non- Banking Finance Companies (NBFC’s) for implementation of Indian Accounting Standards (Ind AS) converged with the International Financial Reporting Standards (IFRS).

The Indian Accounting Standards (Ind AS) shall be applicable to the companies as follows:

(i)On voluntary basis for financial statements for accounting periods beginning on or after April 1, 2015, with the comparatives for the periods ending 31st March, 2015 or thereafter;

(ii)On mandatory basis for the accounting periods beginning on or after April 1, 2016, with comparatives for the periods ending 31st March, 2016, or thereafter, for the companies specified below:

(a)Companies whose equity and/or debt securities are listed or are in the process of listing on any stock exchange in India or outside India and having net worth of Rs. 500 Crore or more.

(b)Companies other than those covered in (ii) (a) above, having net worth of Rs. 500 Crore or more.

(c)Holding, subsidiary, joint venture or associate companies of companies covered under (ii) (a) and (ii) (b) above.

(iii)On mandatory basis for the accounting periods beginning on or after April 1, 2017, with comparatives for the periods ending 31st March, 2017, or thereafter, for the companies specified below:

(a)Companies whose equity and/or debt securities are listed or are in the process of being listed on any stock exchange in India or outside India and having net worth of less than rupees 500 Crore.

(b)Companies other than those covered in paragraph (ii) and paragraph (iii)(a) above that is unlisted companies having net worth of rupees 250 crore or more but less than rupees 500 Crore.

(c)Holding, subsidiary, joint venture or associate companies of companies covered under paragraph (iii) (a) and (iii) (b) above.

However, Companies whose securities are listed or in the process of listing on SME exchanges shall not be required to apply Ind AS. Such companies shall continue to comply with the existing Accounting Standards unless they choose otherwise.

(iv)Once a company opts to follow the Indian Accounting Standards (Ind AS), it shall be required to follow the Ind AS for all the subsequent financial statements.

(v)Companies not covered by the above roadmap shall continue to apply existing Accounting Standards prescribed in Annexure to the Companies (Accounting Standards) Rules, 2006.

A notification on the above lines shall be issued shortly.

ICAI ON C&AG REPORT

ICAI ON C&AG REPORT                                         Attention has been drawn to certain issues raised on the certification work done by the members of the profession in the report of Comptroller and Auditor General of India (C&AG) entitled ‘Appreciation of Third Party (Chartered Accountant) Reporting in Assessment proceedings’ (Report No. 32 of 2014).

The issues raised in said report were deliberated in the recent meeting of the Council held from 23rd to 25th December, 2014. The Council was of the view that:

1.  Issues raised in the report be studied for initiating a structured and meaningful dialogue with the office of C&AG.

2.  Necessary steps be initiated against the erring members wherever any act of professional misconduct is observed.

3.  Refer details of all such members to the Disciplinary Directorate, who are said to have done Tax Audit, under section 44AB of the Income Tax Act, 1961, more than the limit prescribed by the Institute.

4.  Develop an IT based system in coordination with the authorities concerned especially to obtain the report of total numbers of Tax Audit done by each member to find out the details of the members not adhering to the Institute’s guidelines.

5.  Call for such information, as required, from the members invoking authority under the relevant provisions of the Chartered Accountants Act, 1949 and Regulations/ Rules framed thereunder.

6.  Keep the communication channels updated especially with the stakeholders so as to protect the interest of the profession.

7.  Create a Special Cell with proper staff to deal with these matters in an urgent manner.

V. Sagar
Acting Secretary
The Institute of Chartered Accountants of India
27th December, 2014

CAG pulls up chartered accountants for incorrect income tax information

CAG pulls up chartered accountants for incorrect income tax information

 Coming down heavily on chartered accountants hired by the income tax department, a CAG report on Friday said their failure to submit correct tax information resulted in levying of lower taxes by as much as Rs 2,813.11 crore in 367 cases surveyed.

"We found cases where the CAs failed to report full and correct information in 367 cases leading to short levy of taxes of Rs 2,813.11 crore and where the Assessment Officers failed to utilise the information available in 102 reports or certificates submitted to them leading to short levy of taxes of Rs 1,310.05 crore," said the report of the official auditor.

"We also found in another 616 cases where CAs committed mistakes viz in allowance of exemption or deductions, charging of tax on book profit under Section 115JB, adoption of arm's length price and reporting on cash payments exceeding Rs 20,000 per day," it said.

The performance audit covered assessments completed during the period from financial years 2010-11 to 2012-13 and up to the date of audit.

In case of major audit observations, it said assessment records of previous assessment years (AYs) were also linked wherever found necessary.

"We found that 18.87 per cent of CAs (12,435 CAs) for 2013-14 issued more tax audit reports than prescribed by ICAI. We also got cases where CAs did not mention their membership numbers," it said.

Income tax department did not refer any case for professional negligence to ICAI for taking action against erring CAs, it said.

The report also said that CAs failed to give correct information relating to allowance of depreciation in 66 cases involving short levy of tax of Rs 457.79 crore

Tax auditors did not report correct information regarding brought forward loss or depreciation resulting in irregular brought forward loss or depreciation allowance in 46 cases involving short levy of tax of Rs 557.79 crore, it said.

"We have also commented on lacunae in the existing (tax) forms which need modification in order to capture full information of the affairs of assessees so that taxes are applied correctly," it said.

The CAs are regarded as facilitators for the Income Tax Department in administering the provisions of the The Income Tax Act, 1961 correctly.

The tax audit reports (TARs) or certificates issued by them serve as a valuable reference guide to the Assessing Officers (AOs) while making assessments.

 

CAG Report Exposes Shocking Carelessness And Blunders By CAs

The Comproller & Auditor General of India (CAG) has issued a report No. 32 of 2014 setting out the results of the performance audit of “Appreciation of Third Party (Chartered Accountant) Certification in Assessment Proceedings of the Department of Revenue”.

The report makes for shocking reading because it exposes the utterly careless manner in which the Chartered Accountants have conducted audits and issued certificates in blatant disregard of all basic norms.

According to the CAG’s report, there has been short levy of taxes to the extent of Rs 2,813.11 crore in the 367 cases which were surveyed, as a result of wrong audit reports issued by CAs.

The report also points out that there are 616 cases where CAs have committed mistakes in allowance of exemption or deductions, charging of tax on book profit under Section 115JB, adoption of arm’s length price and reporting on cash payments exceeding Rs 20,000 per day.

The CAG report gives several illustrations of such carelessness and also provides the names and membership numbers of the CAs who have conducted the audit.

The report also laments that no action u/s 288 of the Act has been taken by the department against the erring CAs.

It may be recalled that the ITAT has recently in Vijay V Meghani vs. DCIT (ITAT Mumbai) passed severe strictures against the CA profession for alleged falling standards. The Tribunal has also advised the ICAI to take action against erring members and to tackle the issue on a war footing.

In response to the criticism advanced by the ITAT, the ICAI had issued a ste [truncated by WhatsApp]

CA institute officials under lens

CA institute officials under lens
Debasish Konar,Nov 22, 2014, 12.00AM IST
KOLKATA: Enforcement directorate is going to summon some senior officials of the Institute of Chartered Accountants of India (ICAI) as the institute had failed to initiate action against the chartered accountants (CAs) involved in chit fund scams. The accused CAs had vouched false audit reports.

When the SFIO (Serious Fraud Investigation Office) had been analyzing the audit reports of the Ponzi firms, the fabricated reports made by these CAs had led them nowhere.

ED, while probing the Saradha scam, found that the CAs had given false statements while making the audit reports. The agency found that a number of these CAs were directly involved in the scam. Not only the CAs involved with Saradha, but CAs involved with other chit funds were also found submitting false reports.

ED's special director Yogesh Gupta, who is himself a CA, wrote to the ethical committee of the institute complain about these unethical CAs. Some CAs had told ED that they were removed from the Ponzi firms when they refused to sign bogus audit reports.

The ethical committee was asked to initiate action against the CAs and already about 40 CAs have been identified for such unethical practices. According to ED officials, 10 of them were in gross misconduct, being part of the nexus.

An ED official said, "About 15 other CAs had been grossly negligent as they did not verify the audit reports properly and simply signed them. Another 15 CAs were found to be negligent and failed to perform their duty according to professional rules."

ICAI is yet to take action against these CAs. The institute informed ED that there was no proper process to cancel the practicing certificate.

Forwarded as received

CPE requirement for 2014-2016

CPE HOURS REQUIREMENTS FOR THE BLOCK PERIOD OF 3 YEARS (1-1-2014 TO 31-12-2016) TO BE COMPLIED WITH BY DIFFERENT CATEGORIES OF MEMBERS

A. All the members (aged less than 60 years) who are holding Certificate of Practice (except all those members who are residing abroad) are required to: 

a) Complete at least 90 CPE credit hours in a rolling period of three-years. 

b) Complete minimum 20 CPE credit hours of structured learning in each calendar year. 

C) Out of the 90 CPE Credit Hours as mentioned above, 30 CPE credit hours can be completed either through Structured or Unstructured learning (as per Member’s choice). 

 

B. All the members (aged less than 60 years) who are not holding Certificate of Practice and all the members who are residing abroad (whether holding Certificate of Practice or not) are required to: 

(a) Complete at least 45 CPE credit hours either structured or unstructured learning (as per Member’s choice) in rolling period of three-years 

b) Complete minimum 10 CPE credit hours of either structured or unstructured learning (as per member’s choice) in each calendar year. 

 

 C. All the members (aged 60 years & above) who are holding Certificate of Practice, are required to: 

a) Complete at least an aggregate of 70 CPE credit hours of either Structured or Unstructured Learning (as per member’s choice) in a rolling period of three years 

b) Complete minimum of 10 CPE credit hours being an aggregate of either Structured or Unstructured Learning in the first calendar year i.e. 2014. 

c) Complete minimum of 20 CPE credit hours being an aggregate of either Structured or Unstructured Learning (as per member’s choice) in the second and third calendar years i.e. 2015 & 2016 

Guidance note on tax audit

Updated Guidance note on tax audit by ICAI

http://220.227.161.86/34728gn-taxaudit-dtcicai.pdf

CA journal at home address

Announcement

Get your copy of Journal at your Residential Address

The Editorial Board is pleased to inform the ICAI Members, particularly the Members in Industry, that now they can opt their ‘Residential Address’ to receive the copy of The Chartered Accountant journal by following the below mentioned procedure.

Go to the ‘Members’ section placed on the top bar of ICAI website (www.icai.org). The required link in the ‘Members’ section is titled ‘Members: Update Your Residential and Professional Addresses’ (http://www.icai.org/addupdate/). Fill the Membership No and Date of Birth to open the Form. In the Form only tick the option “Do you want to get your journal on Residential Address” at the bottom of the Form. Thereafter you will get your copy of the Journal at your residential address.

Any queries or complaints in this regard can also be sent by email at journal@icai.in or contact at 0120-3045921.

For more details, please look at Announcements section in ICAI Website. 

Representation made by ICAI with respect to new formats of Form No.3CA/3CB and 3CD

Representation made by ICAI with respect to new formats of Form No.3CA/3CB and 3CD. - (11-08-2014)
The new formats of tax audit reports namely Form No.3CA, 3CB and 3CD have been notified through Notification no. 33/2014 on 25/7/2014 with immediate effect. With regard to the same, certain genuine concerns were raised by the members, which, ICAI has, through a representation dated 07.08.2014, brought to the notice of the Hon’ble Finance Minister, Revenue Secretary, and Chairman CBDT for appropriate action at their end. Also, certain preliminary observations on the new forms have been shared with them.

For the reasons mentioned in detail in the representation and summarized below, ICAI has suggested:

The new formats of tax audit reports be made effective from the Assessment Year 2015-16 and not Assessment Year 2014-15. Alternatively, the due date for furnishing tax audit reports for the Assessment Year 2014-15 may be extended to 30th November, 2014

It has also been suggested that appropriate clarification be issued with regard to the position of the tax audit reports e-filed during 01.04.2014 to 24.07.2014 relating to Assessment Year 2014-15.

Reasons given in brief:

a) The Internationally accepted Standard on Auditing-700 has not been considered.
b) The audit of 50% of the taxpayers like listed companies, PSUs, Banks, Insurance Companies have already been completed and the financial statements are published. Only, the audit reports are pending for uploading in the e-filing portal.
c) The notification has been issued just two months before the last date of furnishing tax audit report and the schema for the same is not yet made available. This will cause undue hardship to both the taxpayer and the auditors.

Direct Taxes Committee, ICAI

CA Final results May 2014

Group	No. of Candidates appeared	No. of candidates passed	Pass %	Pass % in Nov 13
Both Group	42533	3100	7.29%	3.11%
Group- I	65792	8884	13.50%	5.67%
Group-II	65706	7004	10.66%	7.35%

Digital library

ICAI Launches digital library

U can download many publications FOC.

Very useful and handy.

http://icaidigitallibrary.org/index.php?option=com_booklibrary&view=all_categories&layout=categories&Itemid=697

Tax Audit limit for a Financial Year

The Council of the Institute at its 331st meeting held in February, 2014 decided to increase the specified number of tax audits from 45 to 60 and an Announcement dated 11.2.2014 in this regard was hosted on the website of the Institute. The Council subsequently at its 333rd meeting held in May, 2014 decided that the specified limit of 60 would relate to an assessment year as against the existing stipulation of a financial year.
In view of the aforesaid decisions of the Council, the existing Para 6 of Chapter VI of the Council Guidelines No. 1-CA(7)/02/2008 dated 8th August, 2008 as contained in Appendix No. (34) to the Chartered Accountants Act, 1949 stands modified as under:-
1. In para 6.1 (a) and (b), the figure “45” pertaining to specified number of tax audit assignment has been substituted by the figure “60”.
2. In para 6.0 and 6.1, the words “in a financial year” have been substituted by the words “relating to an assessment year”.
3. In para 6.1.6, the words “in each financial year” have been substituted by the words “relating to each assessment year”.
As already announced the revised limit of 60 tax audits would be applicable w.e.f. 1st April, 2014. The above announcement is published for information of the members at large.

(T. Karthikeyan)

CAS can't write accounts and then audit.

FYI - CAs cannot undertake assignment of audit & accounting work together for same entity
Announcement on prohibition to undertake the assignment of audit and accounting work together for the same entity. – (20-05-2014)
No. ICAI/ESB/2014/03
It has come to the knowledge of some members that certain entities , while inviting tenders for services of chartered accountants for the assignment of statutory audit , are mentioning accounting and book keeping related works in the scope of works required to done by the auditor.
Members are hereby advised not to undertake such assignment since it is violative of the provisions of ‘Code of Ethics’ and ‘Guidance Note on Independence of Auditors’ for auditor of an entity to do book keeping work of the entity. The said prohibition in the case of Companies is further also mentioned in Section 144 of the Companies Act, 2013.

ICAI expresses its concern on the proposed definition of “Accountant” in DTC, 2013 - (17-04-2014)

ICAI expresses its concern on the proposed definition of “Accountant” in DTC, 2013 - (17-04-2014)

As the members are aware, the Direct Taxes Code, 2013 has proposed to widen the scope of the definition “Accountant” to include other professionals as well. It is a fact that various provisions in the Income-tax Act, 1961 under which chartered accountants have been given the responsibilities to undertake audit and certification of accounts of various entities have the emphasis on “audit” of the relevant accounts which is the exclusive domain of Chartered Accountants. 

The Council of ICAI is aware that the proposed change is a cause of major concern to the entire profession. In this regard, ICAI has through a representation to Ministry of Finance, placed on record its concern not only for the profession, but for the country as a whole since issuance of audit certificates by persons having limited knowledge of audit of accounts will not only be professionally incorrect and but will raise many concerns including causing huge revenue leakages. 

A meeting in this regard was held with Mr. Rajiv Takru, Revenue Secretary and Mr. R.K.Tewari, Chairman, CBDT on 16.4.2014, wherein CA. K. Raghu, President, ICAI and CA. Manoj Fadnis, Vice President, ICAI emphasized on the fact that there is a very significant difference in the area of expertise of other professionals vis-a-vis Chartered Accountants. 

Members be assured that the Council of ICAI is equally concerned and will not leave any stone unturned to save the profession and the nation. 

ICAI has made amendments to the Auditors Report format

ICAI has made amendments to the Auditors Report format as under

- Announcement 1 : Manner of Reporting on Section 227(3)(bb) of the
Companies Act, 1956. <http://220.227.161.86/32148aasb22246-1.pdf>

- Announcement 2 : Reference to the Accounting Standards Applicable to
the Companies in the Auditor's Report and Limited Review Reports and
various Engagement Standards.<http://220.227.161.86/32149aasb22246-2.pdf>

- Announcement 3 : Amendment to the "Auditor's Responsibility" Paragraph
Included in the Independent Auditor's
Report.<http://220.227.161.86/32150aasb22246-3.pdf>

- Announcement 4 : Use of the Term "Profit and Loss Account" or
"Statement of Profit and Loss" in the Statutory Audit Reports of
Companies.<http://220.227.161.86/32151aasb22246-4.pdf>

- Announcement 5 : Manner of Reporting In Respect of Such Clauses of the
Companies (Auditor's Report) Order, 2003 Which Are Not Applicable to the
Auditee Company. <http://220.227.161.86/32152aasb22246-5.pdf>

ICAI to have TV channel

ICAI have signed an MOU today with MHRD for launching a new TV channel -ICAI TV on 15th August 2014.

Tax Audit Limit Increased to 60

Tax Audit Limit Increased From 45 to 60 for audits conducted during the financial year 2014-15 and onwards. - (11-02-2014)

In view of the enhancement of professional competence of members to perform quality services in an IT-enabled environment, the Council of the Institute at its 331st meeting held from 10th to 12th February, 2014 has decided to increase the "specified number of tax audit assignments" for practicing Chartered Accountants, as an individual or as a partner in a firm , from 45 to 60. The said limit will be effective for the audits conducted during the financial year 2014-15 and onwards. Accordingly, the Council Guidelines No.1-CA(7)/02/2008, dated 8th August,2008 stands amended from 1.4.2014 as under:- In the Council General Guidelines, 2008, the Council Guidelines No.1-CA(7)/02/2008, dated 8th August,2008, in Chapter VI "Tax Audit assignments under Section 44AB of the Income-tax Act, 1961 ", in Explanation given in Para 6.1, in sub-para(a) and sub-para(b), the figure "45" be substituted with the figure "60".

Clarification on Applicability of CPE hours requirement for the newly enrolled members

Clarification on Applicability of CPE hours requirement for the newly enrolled
members during the block of three years 1.1.2011 to 31.12.2013. - (09-12-2013)1.

As per the Statement on CPE a member is exempted only for the particular calendar year during which he gets his membership for the first time.2.  For Example: members enrolled at any point of time during the Calendar year 2011 (1st January-31st December, 2011) are exempted for the Calendar Year 2011. For the Calendar Years 2012 & 2013 they would be required to comply with proportionate CPE hours requirement. Members enrolled during the year 2011 with COP would be required to complete 60 CPE hours in the calendar year 2012 and 13. Out of 60 CPE hours, minimum 40 CPE hours should be under Structured Learning and 20 CPE hours under Structured/Unstructured Learning as per choice and Non-COP holders are required to complete 30 CPE hours under Structured/Unstructured Learning as per choice.3   members enrolled at any point of time during the Calendar year 2012 (1st January-31st December, 2012) are exempted for the Calendar Year 2012. For the Calendar Year 2013 they would be required to comply with proportionate CPE hours requirement. Members enrolled during the year 2012 with COP would be required to complete 30 CPE hours for the calendar year 2013. Out of 30 CPE hours minimum 20 CPE hours should be under Structured Learning and 10 CPE hours under Structured/Unstructured Learning as per choice and Non-COP holders are required to complete 15 CPE hours under Structured/Unstructured Learning as per choice for the calendar year 2013.4   members enrolled at any point of time during the Calendar year 2013 (1st January-31st December, 2013) whether holding COP or not are exempted for this block of three years (2011 to 2013)5.  ICAI’s CPE Advisory on Unstructured Learning and prescribed format for claiming Unstructured CPE Credit hours is available at URL:http://www.cpeicai.org/Advisory-Unstructured%20Learning%20Activities.pdf.