Institute of Chartered Accountants of India
Institute of Chartered Accountants of India
The Institute of Chartered Accountants of India (ICAI ) is a national professional accounting body of India.
It was established on 1 July 1949 as a body corporate under the Chartered Accountants Act, 1949 enacted by the
Parliament (acting as the provisional Parliament of India ) to regulate the profession of Chartered Accountancy in India.
ICAI is the second largest
professional accounting body in the world in terms of membership second only to American Institute of
Certified Public Accountants .
ICAI is the only licensing
cum regulating body of the financial audit and accountancy profession in India. It recommends the accounting standards to be followed by companies in India to the National Advisory Committee on
Accounting Standards (NACAS) and sets the accounting standards to be followed by other types of organisations.
ICAI is solely responsible for setting the
auditing and assurance standards to be followed in the audit of financial statements in India.
The motto of the ICAI is Ya Aeshu Suptaeshu Jagruti
( Sanskrit:या एष सुप्तेषु जागति). The motto literally means "a
person who is awake in those that sleep". It is a quotation from the Upanishads (Kathopanishad). It was given to the ICAI at the time of its formation in 1949
by Sri Aurobindo.
Members of the Institute are known as Chartered Accountants . However the word chartered does not
refer to or flow from any Royal Charter . Chartered Accountants are subject to a published Code of Ethics
and professional standards, violation of which is subject to disciplinary action. Only a member of ICAI can be
appointed as auditor of an Indian company under the Companies Act, 1956. The management of the Institute
is vested with its Council with the president acting as its Chief Executive Authority. A person can become a
member of ICAI by taking prescribed examinations and undergoing three years of practical training.
The membership course is well known for its rigorous standards.
ICAI has entered into mutual recognition
agreements with other professional accounting bodies world-wide for reciprocal membership recognition.
ICAI is one of the founder members of the International Federation of Accountants (IFAC), South Asian
Federation of Accountants (SAFA), and Confederation of Asian and Pacific Accountants (CAPA). ICAI was formerly
the provisional jurisdiction for XBRL International in India.
Role of Chartered Accountants
Chartered Accountants enjoy a statutory monopoly in audit of financial statements under the Companies Act 1956, Income Tax Act, 1961 and various other statutes
in India. Financial statements audited by a chartered accountant are presumed to have been prepared according to GAAP in India (otherwise the audit report should be qualified). However, not all
Chartered Accountants work in audit. Firms of accountants provide varied business services, and many accountants are employed in commerce and industry.
Their areas of expertise include financial reporting ,
auditing and assurance, arbitration , risk management ,
economics, corporate finance , management accounting ,
information systems audit , corporate law , direct tax ,
indirect tax and valuation of businesses . The
Government of India is now planning to open up a new
field of practice in social audit of government welfare
schemes like MGNREGA and JnNURM . Apart from the field of professional
practice, some CAs work in industry and commerce in
financial and general management positions such as
CFO and CEO.
Presidents
ICAI's first president was CA. G. P. Kapadia (1949 to
1952). CA. K. Raghu is the current president of ICAI
and CA. Manoj Fadnis is current vice president. [24] It
has become a convention in ICAI to elevate the vice
president as the president in his subsequent term.
Though there is no legal requirement to do so, vice
presidents are elevated as presidents on account of
their experience acting as vice presidents. Notable past
presidents include CA.Y H Malegam , CA. Kamlesh Shivji
Vikamsey (2005–06) CA. T. N. Manoharan (2006–07),
CA. Sunil Talati (2007-2008), CA. Ved Jain (2008-2009)
CA. Uttam Prakash Agarwal(2009–10) CA. Amarjit
Chopra (2010–11), Rama Swamy ( 2011–12) Jaydeep
Narendra Shah (2012–13) Subodh K Agarwal (2013–14),
CA. K. Raghu (2014- ).
Regional Councils
The Institute also has five Regional Councils that assist it in its functions:
The Northern India Regional Council (NIRC)
The Western India Regional Council (WIRC)
The Central India Regional Council (CIRC)
The Eastern India Regional Council (EIRC)
The Southern India Regional Council (SIRC)
The Council maintains a register of all members of the
Institute.
Examination
The CA course is designed to combine theoretical study with practical training. The Chartered Accountancy
course is considered to be one of the rigorous professional courses in India with only 10–15% of the
students passing in every attempt.
For instance,in
the November 2013 CA Final exam, the pass percentage
was merely 3.11% (Both Groups) As of April
2010,the institute has 874,694 students, studying
various levels of the Chartered Accountancy Course.
The Chartered Accountancy examinations are divided
into three levels.
[36] CPT covers four basic subjects viz. Fundamentals
of Accounting, Mercantile Laws, Economics and
Quantitative Aptitude. Fundamentals of Accounting
carries 60 marks, Mercantile Laws carries 40 marks and
Economics & Quantitative Aptitude carries 50 marks
each. A person can register for CPT after completing
Grade 10 and take the exam after completing High
School (Grade 12). Every incorrect answer on the CPT
exam carries a 0.25 negative mark. A candidate is
considered to have cleared CPT if he/she obtains in a
sitting 30% in each of the 4 sections and a 50%
aggregate in the entire examination.
This amendment was enforced by ICAI on 16 August
2012.The amendment was made public vide ICAI's
website notification. CPT exams are held in June and
December in paper pencil mode. Mock test/Model test
papers are available on the institute website.
IPCC or Integrated Professional Competence Course is
the second level of Chartered Accountancy
examinations. A person can take the IPCC Examination
after passing CPT and nine months of study. IPCC has
two groups of seven subjects. Group – I consists of four
subjects and Group – II of three subjects.
Group I:
Paper 1 : Accounting
Paper 2 : Business Laws, Ethics and Communication
Paper 3 : Cost Accounting and Financial Management
Paper 4 : Taxation
Group II:
Paper 5 : Advanced Accounting
Paper 6 : Auditing and Assurance
Paper 7 : Information Technology and Strategic
Management
A passing grade in IPCC is awarded if the candidate
obtains 40% marks in each subject (a subject is
attributed 100 marks) and an aggregate of 50% in the
aggregate in each group. Benefit of set-off is also
available if the candidate appears for both groups
together and obtains 50% collectively in both groups,
even if he fails to obtain an individual aggregate of
50% in the each group independently.
CA Final Examination is the last and final level of
Chartered Accountancy Examinations. It is considered
as one of the toughest exam in the world. [38] Any
person who has passed both the groups of IPCC,
during the last six months of articleship can take the
Final Examination. This exam consists of two groups of
four subjects each.
Group I:
Paper 1 : Financial Reporting,
Paper 2 : Strategic Financial Management,
Paper 3 : Advanced Auditing and Professional Ethics,
Paper 4 : Corporate and Allied Laws,
Group II:
Paper 5 : Advanced Management Accounting,
Paper 6 : Information Systems Control and Audit,
Paper 7 : Direct Tax Laws
Paper 8 : Indirect Tax Laws.
The passing grade for this exam is the same as the
second level, i.e. IPCC, as mentioned above.
ICAI conducts CPT exams in June and December, IPCC
and Final examinations in May and November each
year. Examinations are conducted in major cities in
India and other countries such as Abu Dhabi (U.A.E.),
Dubai (U.A.E.) and Kathmandu (Nepal). ICAI updates
the content and format of examinations periodically
keeping in view the technical progress and changes in
practice of the profession. The ICAI last revised its
training course for membership in 2008.
Accounting Standards
As of 2010, the Institute of Chartered Accountants of
India has issued 32 Accounting Standards. These are
numbered AS-1 to AS-7 and AS-9 to AS-32 (AS-8 is no
longer in force since it was merged with AS-26).
Compliance with accounting standards issued by ICAI
has become a statutory requirement with the notification of Companies (Accounting Standards) Rules,
2006 by the Government of India. [50] Before the constitution of the National Advisory Committee on
Accounting Standards (NACAS ), the institute was the sole accounting standard setter in India. However
NACAS is not an independent body. It can only consider accounting standards recommended by ICAI
and advise the Government of India to notify them under the Companies Act, 1956. Further the Accounting
Standards so notified are applicable only to companies
registered under the companies act, 1956. For all other
entities the accounting standards issued the ICAI continue to apply.
Notable members
Naina Lal Kidwai , Group General Manager and
Country Head of HSBC India
Suresh Prabhakar Prabhu , incumbent Minister of
Railways, Government of India
Deepak Parekh , Chairman of Housing Development
Finance Corporation (HDFC)
Kumar Mangalam Birla , Chairman of Aditya Birla
Group
Piyush Goyal,minister of coal,power and Non
Conventional Energy.
Motilal Oswal, Chairman and Managing Director of
Motilal Oswal Group
Swaminathan Gurumurthy , co-convenor of the
Swadeshi Jagaran Manch and Journalist
Aditya Puri, Managing Director of HDFC Bank
Rameshwar Thakur , former Union minister of India,
former President of the Institute of Chartered
Accountants of India
T.V. Mohandas Pai , Chairman of Manipal Global
Education, former CFO of Infosys
K. Rahman Khan , Minister of Minority Affairs, former
Deputy Chairman of the Rajya Sabha
Thomas Chazhikadan , Member of Legislative
Assembly, Govt. of Kerala
Aroon Purie , founder and editor-in-chief of India
Today and Chief Executive of the India Today Group
Shekar Kapur, film director
G. Venkateswaran , film producer
Pepsi Uma, TV anchor
Harish Salve , former Solicitor General of India
T. N. Manoharan , Padmashree Awardee
Yakub Memon , Prime Accused in 1993 Bombay
bombings case
Prannoy Roy , chairman of NDTV [citation needed]
Rakesh Jhunjhunwala, investor
Kirit Somaiya , BJP leader
T.K.Kurien ,MD of Wipro
Hiranandani ,renowned builder
