Major highlights of draft guideline on Goods and service tax

1. Central and state GST will apply on all transaction of goods and services.

2. Tax paid as central GST will be allowed to taken as input tax credit.

3. State GST will also be allowed to be taken as input tax credit.

4. Cross-utilisation of input tax credit not allowed.

5. GST administration to be separate for State and Centre.

6. GST payer to be allotted a unique ID number linked to PAN number

7. Tobacco products also subjected to GST

8. Alcoholic beverages to be kept out of GST and to be taxed at sales tax/VAT rate instead of GST Sales tax to be applied on petroleum products

9. No decision on excluding natural gas from GST

10. “Necessary items” to attract lower GST rate

11. Services to be taxed at a single rate for both centre and state

12. Small traders to be kept out of GST net

13. Businesses with annual turnover below Rs 10 lakh to be exempt from State GST

14. Businesses below annual turnover of Rs 1.5 crore to be exempt from central GST

15. GST to have composition/ compounding scheme to avoid instances of double taxation-Proposes compounding cut-off at Rs 50 lakh of gross annual turnover and floor rate of 0.5% across the states

16. Central and state GST to be applied on goods and services imported

17. GST on imported goods and services to follow destination principle

18. Inter-state transactions to attract Centre and State GST- GST on inter-state transactions can be set off against future transactions

Three-month training to be mandatory after CA course

New Delhi: Accounting regulator, Institute of Chartered Accountants of India (ICAI), is planning to introduce a three-month mandatory training course for its students who pass the chartered accountancy and accounting technician examination every year. This would mean that a student after qualifying three year chartered accountancy course and one year accounting technician course will have to undergo an additional three months training programme.

ICAI president Uttam Prakash Agarwal said, "At present, the students who are pursuing chartered accountancy course or accounting technician course will not get any in-house training in fields like IT, management, communication skills. The three months training given to the students will help them to cope up in a better manner in the corporate world."

For this the institute is planning to spend around Rs 200 crore in setting up centres of excellence at Jaipur, Jaiselmer, Hyderabad and Bangalore. The purpose of setting up these centres is for organising orientation programmes and providing training in various fields like IT, management and communication skills.

Agarwal further said, "Once the infrastructure is created, we will make the training mandatory for three months as giving a better quality service is the need of the hour." Agarwal also said that apart from the students who pass out every year from the institute, the existing members of ICAI can also join the training programme if they want.

The institute is also planning to conduct training programmes with the regulators like Sebi, Irda, CBDT.

ICAI has introduced a job portal—"jobs4CAs.icai.org" that offers various job opportunities to its members. Agarwal said, "The job portal of ICAI is a portal where one can find the best accounting jobs which would provide world-class and convenient placement services to our chartered accountants and accounting technicians."

At present, the average salary of a chartered accountant is between 6-7 lakh per annum whereas an accounting technician after pursuing one year course gets somewhere around 2-3 lakh per annum.

Old course of Final extended by two more attempts

An Important Announcement for Students of Final (Old) Examination – Extension by two more attempts i.e. May, 2010 and November, 2010

Students are hereby informed that the Council of the Institute of Chartered Accountants of India, having due regard to the concerns of students belonging to Final (Old) stream, has decided to extend the Final (Old) Examination by two more attempts namely May, 2010 and November, 2010


Students concerned may note that the Council has made it clear that no further extension will be granted under any circumstances.

Practical Training based questions to be given importance in Nov 2009 exams

Important Announcement - November 2009 Examination

The Examination Committee has taken the following important decisions for the November, 2009 examinations. Students are advised to note them carefully.

A. CA course being a professional course, practical training is an essential part of it and accordingly all papers of Professional Competence Examination as well as Final should be practical oriented questions as also of the level of knowledge should be expert and not working knowledge. All questions should be compulsory at both Professional Competence Examination / Integrated Professional Competence Examination and Final examinations.

B. Students appearing for the Professional Competence Examination (PCE) for November, 2009 are advised to carefully note the following important decisions taken in relation to the syllabus and pattern of questions to be set in the examinations.

1. Paper 2 – Auditing and Assurance

Students may note that a detailed announcement regarding applicable Standards on Auditing and the publications of the ICAI relevant for the examination has already been published in the September, 2009 issue of the Newsletter. They may further note that since the fringe benefit tax has been abolished w.e.f. April 1, 2010 no question would be asked on tax audit relating to FBT. Further the provisions of CARO, 2003 would be applicable.

2. Paper 5 – Taxation

The question paper would be of practical nature. Students may note that the coverage of sections for the PCE syllabus is as follows:

PART – I: INCOME–TAX (75 MARKS)

Contents:

* Important definitions in the Income-tax Act, 1961 [Section 2].
* Basis of charge; Rates of taxes applicable for different types of assessees [Sections 4, 111A, 112 & 115BB].
* Concepts of previous year and assessment year [Sections 2, 3, 68 to 69D, 172 to 176].
* Residential status and scope of total income; Income deemed to be received/deemed to accrue or arise in India [Sections 5 to 9].
* Incomes which do not form part of total income [Sections 10 to 13A, 14A, 115BBC].
* Heads of income and the provisions governing computation of income under different heads [Sections 14 to 59, Sections 89, 111A, 112, 115BB, 145].
* Income of other persons included in assessee’s total income [Sections 60 to 65].
* Aggregation of income; Set-off or carry forward and Set-off losses [Sections 70 to 80].
* Deductions from gross total income [Sections 80A to 80U].
* Computation of total income and tax payable; Rebates and relief’s (Comprehensively covers all sections mentioned above).
* Provisions concerning advance tax and tax deducted at source [Sections 190 to 219, 234B & 234C].
* Provisions for filing of return of income [Sections 139 to 140, 234A].

PART – II: SERVICE TAX AND VAT (25 MARKS)

Contents:

* Service tax – Concepts and general principles [Section 64].
* Charge of service tax and taxable services [Sections 65 and 66].
* Valuation of taxable service [Section 67].
* Payment of service tax and filing of returns [Sections 68, 70,71,73A, 73B and 75].
* VAT – Concepts and general principles.

Note: If new legislations are enacted in place of the existing legislations the syllabus will accordingly include the corresponding provisions of such new legislations in the place of the existing legislations with effect from the date to be notified by the Institute. Students shall not be examined with reference to any particular State VAT Law.

3. Further students should clearly note that working notes should form part of the answers.

Note: Students may note that the first paragraph of this announcement is in addition to the announcement already published in the October, 2009 issue of the students’ newsletter – The Chartered Accountant Student.

ICWAI to be renamed as Institute of Cost and Management Accountants of India (ICMAI)

Cost accounting body The Institute of Cost and Works Accountants of India (ICWAI) will soon be known as “Institute of Cost and Management Accountants of India (ICMAI)” with the government agreeing for a change of name of the body.
“The request for the name change to Institute of Cost and Management Accountants of India has been accepted in principle. It will require amendment in the ICWAI Act. We are working on it, hopefully in the near future it will be done,” Corporate Affairs Minister Salman Khurshid said on Friday.

Estamp intiative by MCA

Registrars of Companies have to ensure that proper stamp duty is paid on the instruments registered with their office. As of now, physical submission of documents is mandatory where stamp duty is levied in order to ascertain that applicable stamp duty has been paid. In the present scenario, even though the eForm is submitted instantly, the RoC office has to wait for receipt of physical stamp papers to initiate necessary processing. It results in service delivery time getting longer. Hence, in furtherance of e-governance initiatives, provisions regarding stamp duty applicable on filing of e-forms have been amended and stakeholders shall have facility to pay stamp duty in electronic manner also. As of now, this process shall cover Form 1(including MoA, AoA), Form 5 and Form 44 only, accordingly revised eforms are being introduced w.e.f. 12.09.2009. These provisions shall be applicable to the eforms filed subsequent to this amendment. In case eforms filed earlier are 'Resubmitted' after implementation of this change, e-stamp shall not be applicable.

Keeping in view the requirement of stakeholders awareness, process of e-stamp has not been made mandatory, meaning thereby, stakeholders have option to pay stamp duty in electronic manner through MCA21 system or in physical form as per the existing procedure.Further this process shall be applicable only to such States/Union Territories which have agreed to the request of Ministry of Corporate Affairs for collection of e-stamp duty on their behalf.

List of eForms to which eStamping will be applicable

* Form 1, (including MoA, AoA)
* Form 5
* Form 44
* Form 67

Major differences between the draft of AS 1 (Revised), Presentation of Financial Statements, and existing AS 1 (issued 1979)

The Draft of revised AS 1 generally deals with presentation of financial statements,
whereas existing AS 1 (issued1979) deals only with the disclosure of accounting
policies. The scope covered by the draft is thus much wider and line by line
comparison of the difference with the present standard is not possible. However, the
major requirements as laid down in the draft are as follows..

* An enterprise shall make an explicit statement in the financial statements of
compliance with all the Accounting Standards. Further, the draft allows deviation
from a requirement of an accounting standard in case the management
concludes that compliance with ASs will be misleading and if the regulatory
framework requires or does not prohibit such a departure.

* The draft of revised AS 1 requires presentation and provides criteria for
classification of Current / Non- Current assets / liabilities.

* The draft of revised AS 1 prohibits presentation of any item as extraordinary Item
in the Statement of Comprehensive Income.

* The draft of revised AS 1 requires disclosure of judgments made by management
while framing of accounting polices. Also, it requires disclosure of key
assumptions about the future and other sources of measurement uncertainty that
have significant risk of causing a material adjustment to the carrying amounts of
assets and liabilities within next financial year.

* The draft of revised AS 1 requires classification of expenses to be presented
either based on nature or function of expenses. If classification is based on
function, additional information on the nature of expenses should be disclosed.

* The draft of revised AS 1 requires presentation of statement of financial position
as at the beginning of the earliest period when an entity applies an accounting
policy retrospectively or makes a retrospective restatement of items in the
financial statements, or when it reclassifies items in its financial statements.

* The draft of revised AS 1 requires presentation of components of comprehensive
income (i.e. non-owner changes in equity) are required to be presented in the
Statement of Other Comprehensive Income.

* In respect of reclassification of items, the draft of revised AS 1 requires disclosure of nature, amount and reason for reclassification in the notes to financial statements.

* The draft of revised AS 1 requires the financial statements to include a Statement
of Changes in Equity which, inter alia, includes reconciliation between opening
and closing balance for each component of equity

CA - Lane - Delhi

Mukherjee Nagar in north Delhi is home to a large number of civil service aspirants. Katwaria Sarai is preferred by students trying to crack the engineering and medical entrance exams. And chartered accountants? Well they seem to prefer Laxmi Nagar in east Delhi. So much so that the stretch between Laxmi Nagar and Mother Dairy crossing was recently renamed Chartered Accountant’s Lane. With approximately 5,000 practising CAs and over 15,000 students pursuing the course residing in the locality, the move hardly comes as a surprise.

The students and CAs living in the area feel the move was long overdue. ‘‘One fine morning I saw the lane being renamed. The majority of CA students live here because of the strategic location. It is home. Most of us have been here for at least three or four years. Rented accommodation or hostels are where you will find us. Once you arrive in Laxmi Nagar, you get to know everything about the CA course,’’ says Ashwani, a CA (final) student from Darbhanga in Bihar.

Laxmi Nagar and Shakarpur are home to a large number of outstation students. Close to 100 hostels for boys and girls have come up in the past 10 years and some of them don’t even allow non-CA students. Though for the last decade students from Bihar and UP had been in the majority, of late there has been an influx of aspiring CAs from Haryana, Punjab and Rajasthan.

This corner of east Delhi has everything going for outstation students — from affordable accommodation to the coaching centres with high “strike rates”. ‘‘These two blocks are close to the CA institute. All other facilities including the library and coaching centres are within walking distance. There has been quantum jump in the inflow of students in the last 5-6 years,’’ says CA Rajesh Makkar, who runs one of the most successful coaching classes in Laxmi Nagar.

Catering to the burgeoning demand, some tutors have started taking classes in nearby auditoriums including Pyarelal Bhawan and Andhra School in ITO and also at the FICCI auditorium. ‘‘Everything related to chartered accountancy is either available in this locality or is nearby. Laxmi Nagar and Shakarpur is home to almost 80% of Delhi’s CA students. Even landlords prefer students,’’ says Prince, another CA (final) student.
Although many locals like businessman Karan Singh Negi are against the idea of renaming a road after the CAs, he nevertheless agrees that the huge influx of students has pushed up rents. ‘‘When people in this locality add new rooms, they design them for outstation students,’’ says a local property dealer.

However, the renaming has not been without political heartburn. Few days after the stretch was renamed in the presence of MCD’s Shahdara south zone chairman Ravi Prakash Sharma, local councillor Lata Gupta opposed the step. ‘‘I was not even aware of anything like this. I have raised the issue in the House. Roads should be named after great leaders. The plaques installed would be removed soon. I don’t mind if the stretch is named after a great economist or CA,’’ the councillor says.

Launch of XBRL India Website

XBRL (eXtensible Business Reporting Language) XBRL (eXtensible Business Reporting Language) is a novel way of electronic communication of business and financial data which is revolutionizing business reporting around the world and is immense utility to the capital markets and the investing community. It provides major benefits in the preparation, analysis and communication of business information. XBRL is a cutting-edge technology standard that enables faster and more cost-efficient electronic exchange of information.

The idea behind XBRL is simple. Instead of treating financial information as a block of text, essentially, the XBRL technology allows electronic tagging of each individual item of data so that computers can work on the information using a set of rules. The electronic tags that are applied are standardized and are contained in taxonomies which are essentially the dictionaries used by XBRL that define the specific tags for individual items of data. The tags are applied using a tagging tool that retrieves the tags from the standards taxonomies and applies them to whatever format the financial statements are created in, such as Microsoft Word or Excel.

Seeing the rising importance of XBRL as an effective means of communicating financial information and the plethora of benefits it has to offer, the Institute of Chartered Accountants of India (ICAI), the apex accounting body of the country, constituted the XBRL Group in the year 2007 for undertaking the development and promotion of XBRL in India. The Institute is spearheading the XBRL initiative in the country and is the provisional jurisdiction of XBRL in India. In its endeavor of providing best to its members the Institute has recently launched XBRL India website in the International Conference held at Agra from July 3-5, 2009. The website was launched by CA. Uttam Prakash Agarwal, President, ICAI in the presence of CA. Mohandas Pai, Infosys Technologies and Ms. Liv Watson, XBRL International, Vice Chair. The URL of XBRL India website is www.xbrl.org/in

The ICAI, India jurisdiction has developed the taxonomy for general purpose financial statements for commercial and industrial sector. The exposure draft of the taxonomy has already been issued and it will be sent for accreditation by XBRL, International shortly. Taxonomy for banks is under preparation and exposure draft is expected to be issued shortly

HIGHLIGHTS OF BUDGET 2009 - PROPOSED AMENDMENTS RELATED WITH INCOME TAX PROVISIONS.

1. F.B.T. is abolished w.e.f. A.Y. 2010-11

2. Surcharge is abolished on Ind. Firms etc. (other than companies)

3. Wealth Tax Exemption increase from 15 lakhs to 30 lakhs.

4. Advance Tax deposit limit enhanced from Rs. 5000 to 10000 .

5. Cash Freight payment to a person in a day is increased from Rs. 20000 /- to 35000/-.

6. No TDS on transport Freight if transporter furnish PAN to the payer.

7. Application for approval under section 10(23C) for the F.Y. 2008-09 may be filed upto 30.9.2009.

8. Approval of Charitable Trust under section 80G will be for one time basis i.e. no further periodic renewal will now required for 80G. However CIT will have power to withdraw the said approval.

9. Limit of remuneration to working partners is increased as under :-
On First 3 lakhs of book profit : 90% or 150000 whichever is more
On remaining book profit : 60%
Business & Professional firm both are under same limit.

10. Gift of property/jewellery etc. from non relative will also taxable.

11. Rate of TDS on Plant & Machinery is reduced from 10% to 2%

12. Rate of TDS on Rent of land and building is reduced to 10%

13. Rate of TDS on contract where payee is Individual/HUF will be 1%.

14. Rate of TDS on Non PAN payees will be 20%.

15. A person furnishing Form 15G or 15H will also have a PAN, otherwise payer has to deduct tax @ 20%.

16. Surcharge and cess is abolished on TDS other than TDS on Salary.

17. Presumptive income in case of owner of goods vehicle is increase as under :-
Heavy goods vehicle = 5000/- PM
Other than heavy goods vehicle : 4500/- PM

18. Sec. 44AF is merged in sec. 44AD .i.e. 8% rate will also applicable on retailer.

19. Now sec. 44AD is applicable on all businesses having gross turnover/receipts upto 40 lakhs.

20. Deduction u/s 80DD is increased from 75000 to one lakh.

21. Minimum taxable limit is increased. Male/HUF 1.60 lakhs, Female 1.90 lakhs, Senior citizen 2.40 lakhs.

22. Sec. 50C will also applicable on all transfers (whether registered or unregistered)

23. In Sec. 148 the AO can touch upon the other issued unconnected with escaped income.

24. Deduction under sec. 80E will also available for loan for all fields of studies after senior secondary examination.

25. Anonymous donation received by charitable trust upto 1 lakhs (subject to maximum of 5% of total income) will not be taxable.

26. Deduction under section 10A & 10B will now available upto A.Y. 2011-12.

27. Commodity Transaction Tax is not be applicable w.e.f. 1.4.2009

28. The rate of Minimum Alternate Tax (MAT) is increased to 15%; the same can be set offed upto 10th assessment year.

29. LLP (Limited Liability Partnership Firm) will be treated as partnership firm for the purpose of income tax act.

Return can be filed without UTN - New TDS rule postponed

CBDT has issued a Press Release in which it has been stated that the Notification No. 31 of 2009 dated 25.3.2009 amending or substituting Rules 30, 31, 31A and 31AA of the Income Tax Rules, 1962 shall be kept in abeyance for the time being.

PRESS RELEASE

New Delhi dated 30th June 2009

The Central Board of Direct Taxes have further decided that the Notification No. 31 of 2009 dated 25.3.2009 amending or substituting Rules 30, 31, 31A and 31AA of theIncome Tax Rules, 1962 shall be kept in abeyance for the time being.

Taxpayers filing their income tax returns for assessment year (AY) 2009-10, or any other earlier AY, may continue to file their returns without mentioning the Unique Transaction Number (UTN) as required under the said Notification. The filing of such returns shall be treated as valid and in compliance to the requirements under section 139 of the Income Tax Act, 1961.

Further, the date from which the Notification No. 31 / 2009 shall become applicable on tax deducted at source (TDS) or tax collected at source (TCS) and deposited during the current financial year shall be notified by the Central Board of Direct Taxes subsequently.

All deductors / collectors of TDS / TCS may continue to deposit their TDS / TCS and file their quarterly TDS / TCS returns as per procedure existing prior to issuance of Notification No.31 / 2009 dated 25.3.2009.

How to verify a paid challan

On receipt of the amount, receiving bank will upload the details in the Challan to Government via NSDL through its OLTAS (Online Tax Accounting System) return within 3 working days.

Once deductor makes the payment, he should cross-verify the Amount and CIN that has been uploaded by the receiving Bank to NSDL.

This should be cross-verified by the deductor, with either his TAN number or CIN number provided by bank against each challan.

What is CIN?

Challan Identification Number (CIN) has three parts

1. Seven digit BSR code of the bank branch where tax is deposited
2. Date of Deposit (DD/MM/YY) of tax
3. Serial Number of Challan

Example of CIN:
000076202020832

CIN is stamped on the acknowledgement receipt to uniquely identify the tax payment. CIN has to be quoted in the return of income as a proof of payment. CIN is also to be quoted in any further enquiry. Therefore, you must ensure that CIN (comprising the above three parts) is stamped on the Challan by the bank. If any challan does not contain CIN, immediately contact the Bank and insist on CIN.

If banks does not provide a Proper CIN?
The Reserve Bank of India has already passed an order dated April 1, 2004 making it compulsory for all tax collecting branches of banks to use a rubber stamp acknowledgement that carries CIN. A separate CIN is given for each challan deposited. If the Bank Manager concerned is unable to resolve the issue, you should address your grievance to the Bank's Regional Manager and the Regional Office of RBI.

Steps to verify the challan:

1. Visit www.tin-nsdl.com and click on “Challan Status Enquiry”.
2. Here select either

1. CIN Based View

On entering CIN and amount (optional), deductor can view the following details:

+ BSR Code
+ Date of Deposit
+ Challan Serial Number
+ Major Head Code with description
+ TAN/PAN
+ Name of Tax Payer
+ Received by TIN on (i.e. date of receipt by TIN)
+ Confirmation that the amount entered is correct (if amount is entered)

2. TAN based View:

By providing TAN and financial year, deductor can view the following details:

+ CIN
+ Major Head Code with description
+ Minor Head Code
+ Nature of Payment

If deductor enters the amount against a CIN, the system will confirm whether it matches with the details of amount uploaded by the bank.

3. On getting above details, deductor can consider the result obtained here, irrespective of what has been put in the challan by the bank.

4. If the entry is missing over here, after 3 working days [from the date of issuing counter foil], deductor should contact the Bank Branch to check the matter.

AUDIT OF LLP

Limited Liability Partnership alike Companies are required to get their accounts audited as per the provisions provided under Limited Liability Partnership Rules 2009.

Is it necessary for all LLPs?

No, Only the Limited Liability Partnership whose contribution exceed Rs. 25 Lakh or the Limited Liability Partnership whose turnover exceed Rs. 40 Lakh are required to annually get their accounts audited by any Chartered Accountant in practice.

Limited Liability Partnerships who are exempted from mandatory audit may also get their accounts audited as per the Limited Liability Partnership Rules 2009.

In case if the partners do not decide for the for audit of the accounts of the LLP a statement to be included in the Statement of Account and Solvency by the partners to the effect that the partners acknowledge their responsibilities for complying with the requirements of the Act and the Rules with respect to preparation of books of account and a certificate in the form mentioned below:

“We declare that the turnover does not exceed/exceeds 40 lakh or the contribution does not exceed/exceeds 25 lakh rupees. The partners/authorized representatives have taken proper care and responsibility for maintenance of adequate accounting records and preparation of accounts in accordance with the provisions of the LLP Act and the Rules made there under”.

This certificate to be filed with the Registrar of Companies, LLP along with e Form 8.

Appointment of Auditor

Limited Liability Partnerships who mandatorily require auditing of their accounts shall appoint an auditor within 30 days before the end of each Financial Year i.e. before 1st March of each year. In case of First Financial year the auditor to be appointed before the end of the First Financial Year.

The Designated Partners responsible for the compliances of LLP will appoint the auditor also. However if the designated partner fails to appoint the auditor then the partners may appoint the auditor.

The auditor appointed shall remain in office until new auditor is appointed or the majority of Partners have given a notice for the non appointment of existing auditor. Such notice of auditor of Partners may be in hard copy or electronic Form and must be authenticated by the Partners giving the notice.

Remuneration of Auditors Remuneration of Partners may be fixed by the Designated Partners or if any procedure has been prescribed in the LLP Agreement the remuneration to be decided as per that provision.

Resignation of Auditor

An auditor may resign by depositing a notice in writing to that effect at the LLP’s registered office. Such Notice is to be accompanied by the statement of the circumstances connected with his ceasing to hold office. In case if a auditor is unwilling to be re –appointed he shall give a notice in writing to that effect at the LLP’s registered office, not less than 14 days before the end of the time allowed for appointing the new auditor.

Removal of Auditor

An auditor may be removed from his office at any time as per the procedure mentioned in the LLP Agreement. In the absence of LLP Agreement the auditor may be removed with the consent of all the Partners

Complaints relating to dummy articles and coaching

The following email ids have been configured for lodging complaints relating to matters of dummy articles and coaching classes during non-permissible hours.

complaints.dummyarticles@icai.in - Complaints/matters relating to dummy articles
complaints.coachinghours@icai.in - Complaints/matters relating to coaching class during non-permissible hours (i.e. between 9.30 A.M. and 5.30 P.M)

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.

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

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
4. PDLC

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
2. SPLMS
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

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.

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.