Friday, May 22, 2009

ICAI - Memorandum of Understanding (MoU) between ICAI and University

The Institute of Chartered Accountants of India (ICAI) and Indo-African Chambers of Commerce and Industry celebrated Africa Day from 18-19 May, 2009 at Mumbai. Diplomats from various countries from African Continent congregated to formalize strategy for working towards the growth of the Africa. The diplomats applauded the endeavors of India for development of African continent and expressed confidence for taking forward the productive relationship among India and Africa to new heights.

To mark the augmentation of relationship a Memorandum of Understanding between ICAI and University of Djbouti was signed for imparting training to Djbouti nationals in sphere of accountancy and working collaboratively for institutionalization of Accountancy Body in Djbouti. Hon’ble Shri S C Jamir Governor, Maharastra, Hon’ble Shri Musalia Mudavadi, Deputy Prime Minister of Kenya and Shri Jayant Rao Patil, Minister of Home Affairs, Maharastra Govt. graced the occasion.

Citing the World Bank Report on Africa Accounting Profession, CA. Uttam Prakash Agarwal, President, ICAI indicated that World Bank Report highlights access, equity, quality of learning, internal efficiency and fiscal sustainability. As some of the areas leading to critical shortage of accountants at all levels and that assistance is required to help the accountancy profession development.

He further added that during its Diamond Jubilee Year, ICAI has pioneered to land a helping hand to all such least developed countries whose economy is under transition.

Speaking on the occasion CA. Uttam Prakash Agarwal, President ICAI lauded the efforts of the African countries for their development. He stated that Africa is full of natural resources and has huge potential to grow itself into a developed continent by complementing the same with development of its human resource through proper education and training especially in financial domains, where ICAI a premier and second largest accounting body across the globe can contribute enormously in capacity building of the human resources especially in areas of Accountancy, Auditing, taxation and in other allied areas. He extended ICAI helping hand to African nations in form of imparting education and training in accountancy to its students, through ICAI. He stressed that accountancy helps a nation to put in place robust financial systems and procedures for proper financial reporting to provide sound governance for furtherance of millennium development goals.

ICAI has been actively sharing its professional expertise in education, training, licensing and helping in framing policy for growth of accountancy profession and countries like Nepal, Srilanka, Oman, Mongolia, Dubai and Djbouti have benefited from the same.

ICAI is premier and second largest accountancy body globally with 155000 members and 500000 students regulating the profession in India. The ICAI has 118 branches and 21 Overseas chapters for promoting the Accountancy profession. ICAI is also founding partner of International Federation of Accountants, Confederation of Asia- Pacific Accountants and South Asian Federation of Accountants.

Wednesday, May 20, 2009

Important Announcement ( Standards on Auditing) - (04-05-2009)

The following list contains the details of the erstwhile Auditing and Assurance Standards (AASs) along with the respective numbers, title of the Standard and the new number and name of the corresponding Standards on Auditing (SAs). For the purposes of June, 2009 examinations the students are advised to refer to the AAS number along with the corresponding number of the new Standard on Auditing (SA).
The details of the AASs revised as Standards on Auditing (SAs) along with the corresponding new numbers are being hosted for the guidance of the students.
Further, the full text of the erstwhile AASs revised as SAs are also attached for the guidance of the students.
Erstwhile AAS Number Title of the Standard New Number and Name of the Standard
1 Basic Principles Governing an Audit SA 200
2 Objectives and Scope of the Audit of Financial Statements SA 200 A
3 Documentation SA 230* (Audit Documentation)
4 The Auditor's Responsibility to Consider Fraud and Error in an Audit of Financial Statements SA 240*
5 Audit Evidence SA 500
6 Risk Assessments and Internal Control SA 400
7 Relying Upon the Work of an Internal Auditor SA 610
8 Audit Planning SA 300* (Planning and Audit of Financial Statements)
9 Using the Work of an Expert SA 620
10 Using the Work of Another Auditor SA 600
11 Representations by Management SA 580* (Written Representations)
12 Responsibility of Joint Auditors SA 299
13 Audit Materiality SA 320
14 Analytical Procedures SA 520
15 Audit Sampling SA 530*
16 Going Concern SA 570*
17 Quality Control for Audit Work SA 220
18 Auditing of Accounting Estimates SA 540* (Auditing of Accounting Estimates, Including Fair Value Accounting Estimates and Related Disclosures)
19 Subsequent Events SA 560*
20 Knowledge of the Business SA 310
21 Consideration of Laws and Regulations in an Audit of Financial Statements SA 250*
22 Initial Engagements – Opening Balances SA 510*
23 Related Parties SA 550*
24 Audit Considerations Relating to Entities Using Service Organisations SA 402
25 Comparatives SA 710
26 Terms of Audit Engagement SA 210
27 Communication of Audit Matters with Those Charged with Governance SA 260*
28 The Auditor's Report on Financial Statements SA 700
29 Audit in a Computer Information Systems Environment SA 401
30 External Confirmations SA 505
31 Engagements to Compile Financial Information SRS 4410
32 Engagements to Perform Agreed – upon Procedures Regarding Financial Information SRS 4400
33 Engagements to Review Financial Statements SRE 2400
34 Audit Evidence – Additional Considerations for Specific Items SA 501
35 The Examination of Prospective Financial Information SAE 3400

Source :- ICAI Website

Friday, May 15, 2009

Important areas in MICS chapeterwise for June 2009 Examination

Lesson 1
1. Characteristics of information
2. decomposition/subsystem principles

Lesson 2
1. Components of TPS
2. Direct Processing

Lesson 3
1. Features of a computer based MIS
2. Programmed & Non programmed decisions
3. Pre-requisites of MIS
4. Limitations of MIS

Lesson 4
1. MRP
2. Model and its advantages
3. systems approach to problem solving

Lesson 5
1. Characteristics of Information used by executives
2. DSS software tools
3. DSS examples

Lesson 6
1. Traditional computing models
2. Client/Server model
3. Server centric model
4. Characteristics of C/S

Lesson 7
1. Systems development approaches
2. data dictionary
3. Fact finding techniques
4. Costs/Benefits of CBIS

Lesson 8
1. Designing systems output
2. systems manual
3. Data communications design
4. printed output/visual display output

Lesson 9
1. Bench marking problem testing
2. program design tools
3. advantages of pre-written software

Lesson 10
1. Personal training
2. Conversion activities
3. systems evaluation

Lesson 12
1. Evaluation of ERP
2. Business engineering
3. characteristics of ERP
4. ERP benefits

Lesson 13
1. OS-Security components
3. Firewalls
4. DBMS controls

Lesson 14
1. Field level interrogation
2. source document controls
3. error handling techniques

Lesson 15
1. Making fraud difficult to perpetrate
2. Disk imaging and analysis technique
3. Frauds at input

Lesson 16
1. Powers of controller
2. duties of certifying authorities
3. Powers of central government

Lesson 17
1. Concurrent audit techniques
2. Audit framework program development and acquisition
3. Program analysis
4. IS audit objectives

Lesson 18
1. Core principles of information security
2. example of information security policy statement
3. types of information protection

Lesson 19
1. Programming work bench
2. levels of integration
3. Meta –CAS

Important areas in advanced auditing chapeterwise for June 2009 Examination

Chapter – 4 : Company auditor

1)Functions of an auditor under companies act 1956 -page 4.19
2)Exemption of branches from audit requirements in certain situation – page 4.27
3)Gist of important circulars – one reading – page 4.34

Chapter –5 : Company audit

1)Types of registers – page 5.7
2)Personal exp of directors – page 5.9
3)Sec 205 – page 5.21
4)Transfer to reserves exceeding 10% - page 5.25
5)Definition of capital reserve, capital receipts – page 5.31
6)Interim dividend – page 5.37
7)Non provision of proposed dividend, non provision of tax in the accounts–page 5.41

Chapter –6 : Audit report

1)Director’s comments on qualifications – page 6.23
2)Short notes on loan outstanding, turnover
3)Important points in comments of matters to be included in report

Paragraph Comments
4(i)(a) 2,3
4(i)(b) 3
4(i)(c) 3,4
4(ii)(a) 3
4(ii)(b) 2
4(ii)(c) 2
4(iii)(a) 1
4(iii)(b) 2
4(iii)(c) 2
4(iii)(d) 1,2
4(iv) 3,4,5
4(v)(a) all
4(v)(b) 2
4(vi) 2,3,4,5
4(vii) 2,3
4(viii) 3
4(ix)(a) 3,4,5
4(ix)(b) 1,2
4(x) 2,3,4
4(xii) 5
4(xiii) all
4(xiv) 2,5
4(xv) 1,2,5
4(xvi) 2,3
4(xvii) 1
4(xviii) all
4(xix) 2
4(xx) 2
4(xxi) 1,2,6

Chapter – 7 : EDP Audit

1) Short notes : batch processing , real time processing – page 7.3
2) Specific problems of EDP relating to internal control – page 7.5
3) Internal control in a computer based system – page 7.14
4) Service Bureau – page 7.26

Chapter – 8 : Investigations

1) Difference between auditing & investingation – page 8.2
2) Special issues in investigations – page 8.6
3) Types of investigations – non statutory – page 8.15
4) Financial due diligence – page 8.36
5) Contents of a due diligence report – page 8.42

Chapter – 10 : Audit of PSU

Propriety audit – page 10.7

Chapter – 11 : Audit of Banks

1) Bills for collections, Bills purchased, Loans & advances, credit card operation – page 11.20
2) Money at call & short notice – page 11.23
3) Investments – page 11.25
4) Threats in recovery, erosion in the value of security – page 11.39
5) CDR – page 11.41
6) Third party guarantees – page 11.60
7) Contingent liabilities – page 11.71
8) Concurrent audit – page 11.77

Chapter – 12 : Audit of General Insurance

1) Legal framework – page 12.1
2) Part I & IV of IRDA Regulation 2002 – page 12.7
3) Auditors report – page 12.18
4) Audit procedures – page 12.21
5) Verification of claims, commission, operating exp – page 12.26,12.28,12.29
6) Investments – page 12.30
7) Unexpired risk reserves & reinsurance – page 12.37
8) Co insurance , solvency margin – page 12.44

Chapter – 13 : Tax Audit

Tax audit u/s 44AB – page 13.4
Form 3CD – page 13.16

Chapter – 14 : Stock Exchange

1) Margins – page 14.5
2) Rolling settlement – page 14.12
3) Circuit filters & circuit breakers – page 14.14
4) Contract notes – page 14.19

Chapter – 15 : Special Aspects

1) Audit of NBFC – page 1 to 11
2) Audit of co-operatives societies – page 15.18
3) Audit of mutual fund
4) Short notes on board of directors, independent directors, audit committee – page 15.47, Peer review – page 15.60

Chapter – 17 : Professional Ethics

Other misconduct, maintenance of branch offices
Part I of First Schedule – Clause 2,4,6,7,11
Part III of First Schedule – Clause 2
Part I of Second Schedule – Clause 1,4,8

Chapter – 18 : Management & operational audit

Desirability of management audit – page 18.5
Behavioural aspects of mgt audit – page 18.15
Audit objectives – page 18.27

Important AAS – 1,6,10,12,13,16,19,21,22,26,28,31

Wednesday, May 6, 2009

How Obama's tax plan will help IT Companies

India's home grown IT companies actually have something to cheer from Obama's tax plan. The plan, if it goes through, will make the likes of TCS, Infosys and Wipro more price competitive against their US counterparts like IBM, HP and Accenture.


This is because the plan imposes huge new tax burdens on American technology companies. An analysis by The Associated Press estimates that collectively, HP, IBM, Cisco, Microsoft and Google lowered their tax bills by a combined $7.4 billion in their last fiscal years by taking advantage of lower tax rates outside the US.


"Through the years, these five companies have avoided US income taxes and foreign withholding taxes on a combined $72 billion in undistributed earnings from their foreign operations. By reinvesting their earnings overseas, US companies insulate themselves from much higher tax rates had the money been made in their home country," an AP report says.


Google, it says, would have been hit with an effective tax rate of 45.2 per cent instead of 27.8 per cent last year if it hadn't been able to capitalise on lower rates overseas. Without the lower foreign rates, Google's 2008 tax bill would have been $1.02 billion higher.


HP, according to AP, reaped a $1.77 billion benefit in its fiscal 2008 from lower foreign tax rates while Cisco and Microsoft each saw benefits of more than $1.6 billion. IBM's foreign tax advantage last year totaled about $1.3 billion, says AP.


"It would be like an earthquake for high tech," Carl Guardino, chief executive of Silicon Valley Leadership Group, an industry trade association , has been quoted as saying. "On a Richter scale of 1 to 10, this would be a 12."


Analysts say that fresh tax impositions would mean that US IT service providers will per force have to increase their billing rates. And if those rates go up, Indian companies become correspondingly more competitive in any IT project for which they are bidding against American competitors.

Sunday, May 3, 2009

ICAI - Convocation - 2009

The Convocation for the newly enrolled Members for the period from September, 2008 to February, 2009 will be held as per schedule given below with a view to inculcate a sense of belongingness and attachment with the Institute.

31st May, 2009 [Sunday] - Western Region - Mumbai
07th June, 2009 [Sunday] - Northern Region - New Delhi
14th June, 2009 [Sunday] - Southern Region - Bangalore [except the members belonging to the State of Tamil Nadu]
21st June, 2009 [Sunday] - Southern Region - Chennai [for members belonging to the State of Tamil Nadu]
28th June, 2009 [Sunday]- Eastern Region - Kolkata
11th July, 2009 [Saturday]- Central Region - Jaipur

Details like venue and timings are being finalized and would soon be communicated to the members and prospective members separately by the Regional Councils concerned.

Members who enrolled as Associate members from 1st September, 2008 to 28th February, 2009 would be eligible to receive their membership certificate in person at the Convocation.

Fellow members and members who were granted Certificate of Practice during this period would also be given their Certificate of Practice at the Convocation from the designated counters.

Members and prospective members (i.e. who have passed the Final examination and are yet to apply for membership or application for membership is under process) are requested to wear the Royal Blue Colour Blazer /Navy Blue Colour Blazer respectively and female members may wear saree / business suit while attending the Convocation and receiving the membership certificate. A tie and a lapel pin, saree pin in case of female members will be presented by the Institute at the convocation.

Such students who have passed the Final Examination held in November, 2008 and have not yet enrolled for membership will be presented the Pass Certificates at the Counters. A lapel pin will be presented at the occasion. However, such students if not already enrolled as Member are advised to seek membership of the Institute in order to be a Member of the coveted family of the Chartered Accountants and also be eligible to use the designation Chartered Accountant. It may be mentioned that Section 24 of the Chartered Accountants Act, 1949 provides for use of the designation Chartered Accountant only to such persons who are Members of the Institute. In other words, a student who has passed final examination cannot use the designation Chartered Accountant unless he has also enrolled himself as a Member.

Members (Associates and Fellow) enrolled and Certificate of Practice granted to members from 1st September 2008 to 28th February 2009 and Students (prospective members) who have passed final examination in November, 2008 are cordially invited to attend the convocation function on the respective date as per the schedule stated above.

ICAI to Give copies of answersheets, court tells centre

The Delhi High Court on Thursday directed the Institute of Chartered Accountants of India (ICAI) to provide students with certified copies of answersheets under the Right to Information Act.
Justice S Ravindra Bhat dismissed contentions raised by the institute that answersheets fell beyond the purview of the RTI, holding that students were well within their rights to access them.
ICAI is an institute. You should apply pragmatism and set examples for others. You should start by yourself... Many institutes do that and allow students to inspect their copies," Justice Bhat told the ICAI, which had challenged a Central Information Commission verdict to provide certified copies of papers to students who failed the exams.
Additional Solicitor General Parag Tripathi, appearing for ICAI, submitted that the Supreme Court in its order of 2007 rejected the candidates' right to demand answersheets.