Compliance Responses and Action Plans

  • Compliance Responses and Action Plans

    IFAC members and associates have provided self-assessment information about the regulatory and standard-setting framework in their countries (Part 1) and their organizations' activities in addressing IFAC's membership requirements (Part 2) as described in the Statements of Membership Obligations. Based on an analysis of this information, they are developing SMO Action Plans for continuous development and improvement.

    Some organizations have qualified to submit SMO Action Plans on a biennial basis by meeting eligibility criteria. These organizations are indicated with an asterisk (*).

    In the interest of transparency and providing information to the profession, regulators, and other stakeholders, all responses and SMO Action Plans are accessible below.

    The Institute of Chartered Accountants of India

     

    Introduction

    The information below has been submitted as part of the IFAC Member Body Compliance program. The Program has two components:

    Part 1: Assessment of the Regulatory and Standard-Setting Framework (provides information about regulatory requirements and standard-setting processes in member body countries); and
    Part 2: Assessment of Compliance (provides information on compliance by member bodies with the Statements of Membership Obligations). Part 2 of the Compliance Program will begin later this year, and the results will also be posted to the website.

    The responses to Part 1 are provided below. IFAC staff has reviewed the responses and, where necessary, validated them with external knowledgeable parties. A list of key terms is available to assist readers in understanding the responses.

    The purpose of this Part 1 Assessment is to collect information on the roles of IFAC member bodies and other organizations (including government, regulatory or other appointed authorities) with respect to:

    1. Setting auditing, accounting, ethics, public sector and education standards; and
    2. Regulating the accountancy profession.

    Sections 1 and 2 of Part 1 contain an introduction and instructions for member body respondents. For this reason, they are not included here, and the responses begin with Section 3.

    Questions or comments may be sent to complianceassessment@ifac.org.


    Section 3 -- Member Body General Information

    1. Country:

      India


    2. Name of member body:
      The Institute of Chartered Accountants of India

      Or please specify name:



    3. Individual responsible for preparation:
      Dr Ashok Haldia, Secretary


    4. Date member body became a member of IFAC:
      Note: Please enter a numeric date (e.g., 12/2001, Month/Year)

      10 / 1977



    Questions 5 - 22 are for internal use only


    Section 3G -- Affiliations


    23. Please list those regional organizations to which your organization belongs (e.g., FEE, CAPA, ECSAFA, IAA, etc.):
      ICAI is a member of the Confederation of Asian and Pacific Accountants (CAPA). ICAI is also member of the South Asian Federation of Accountants (SAFA), a regional grouping of IFAC. The Permanent Secretariat of SAFA is with ICAI.



    Section 4 -- Statutory Framework


    Responses to this section will provide a description of the legal framework governing the commercial aspects of auditing and financial reporting in your country.

    Section 4A -- The Companies Act or Commercial Code


    The following questions concern the Companies Act (the Act) or Commercial Code (the Code) or similar Legal authority in your country. If no Legal authority exists, or the Legal authority does not address particular questions, please indicate "N/A" for Not Applicable.

    24. What is the full name of:
      a). the Act or the Code: The Companies Act ,1956
      b). the Enacting body: The Parliament of the Republic of India
      c). date the Act or Code came into force: 04 / 1956


    25. How can IFAC obtain a copy of the Act or Code?
      ICAI can provide a copy, if required.


    26. Is the Act or Code available in English?
      Yes   No


    27. What are the types of entities covered by the Act or the Code?
      Please check all that apply.
      Listed entities   Other (please specify): Foreign Companies
      Private companies   Other (please specify):
      Governmental   Other (please specify):
      Not-for-profit   Other (please specify):


    28. Is there a requirement for the following entities to prepare annual statutory financial statements? If YES, please describe the financial reporting requirements including the accounting standards to be followed.
      Please check all that apply.
        No Yes (If YES, please describe)
      Listed entities Yes, as per the Companies Act, 1956, all companies are required to prepare annual financial statements. Sections 210 and 211 of the Companies Act, 1956 deal with annual accounts and balance sheet and profit and loss account and their form and contents. Section 210 of the Act requires that every company shall prepare a balance sheet and a profit and loss account as at the end of the period (generally financial year) specified in sub-section (3) of the section 210. In the case of a company not carrying on business for profit, the company shall prepare an annual balance sheet and income and expenditure account. Further section 211(3A) of the Act requires that every profit and loss account and balance sheet of the company shall comply with the accounting standards.
      Private companies Yes - refer to the response for Listed Entities.
      Governmental Yes - refer to the response for Listed Entities.
      Not-for-profit Yes - refer to the response for Listed Entities.
      Other (please describe) Foreign Companies Yes - refer to the response for Listed Entities.
      Other (please describe)


    29. Is there a statutory requirement for the following entities to be audited? If YES, describe the requirement including the auditing standards to be followed:
      Please check all that apply.
        No Yes (If YES, please describe)
      Listed entities The duties and responsibilities of the auditors including the matters on which the auditors have to express opinion and make various statements in their report are provided in the Companies Act, 1956. The auditors are required to comply with the Auditing and Assurance Standards issued by the Auditing and Assurance Standards Board (AASB) of ICAI. These standards are to be applied in the audit of financial statements of all types of entities. While discharging their attest function as auditors, it is the duty of ICAI members to ensure that the Auditing and Assurance Standards are followed in the audit of financial information covered by their audit reports. If, for any reason, a member has not been able to perform an audit in accordance with the Auditing and Assurance Standards, the audit report issued by the member draws attention to the material departures from the requirements of the standards.
      Private companies Yes - refer to the response for Listed Entities.
      Governmental Yes - refer to the response for Listed Entities.
      Not-for-profit Yes - refer to the response for Listed Entities.
      Other (please describe) Foreign Companies Yes - refer to the response for Listed Entities.
      Other (please describe)


    30. Are the auditors ("statutory auditors") that are appointed for audits required by the Act or Code ("statutory audits") appointed for a specific period?
      Yes   No
      If YES, please indicate the term of appointment: 1 Year(s)


    31. Who appoints the statutory auditors?
      Please check all that apply.
      Shareholders   Management
      Board of directors   Other (please specify): In the case of Government Companies, the appointment of auditors is made by the Comptroller & Auditor General of India.
      Audit committee   Other (please specify):
      Government agency   Other (please specify):


    32. Does the Act or Code require joint auditors for the statutory audit?
      Yes   No
      If yes, please describe the requirement:
      The Act as such does not mandate that each company must have joint auditors. Rather the Companies Act, 1956 provides discretion to the companies to appoint joint auditors. The practice of appointing more than one auditor to conduct audit is in vogue in India since long. The banking companies, insurance companies, government companies and other large sized companies in India generally appoint joint auditors.


    33. Does the Act or Code require the rotation of the auditors or audit firms performing statutory audits?
      Yes   No
      If yes, please describe the requirement:



    Section 4B -- Securities Market Regulations


    Responses to this section will provide a description of the financial reporting and auditing requirements for listed entities in your country.

    34. What are (a) the major items of Legal authority for such requirements, (b) the Enacting body(ies) and (c) the latest amendment date? Please identify the specific articles or sections that pertain to auditing and financial reporting:
    1. the major items of Legal authority for such requirements

      The major items of legal authority are the Securities and Exchange Board of India Act, 1992, rules and regulations made thereunder, Listing requirements, guidelines, notifications, etc.

    2. the Enacting body(ies)

      Securities & Exchange Board of India (SEBI) (Regulator for Capital Market in India) enacts the requirements, guidelines, etc.

    3. the latest amendment date?

      The Securities and Exchange Board of India was last amended in the year 2002.


    35. How can IFAC obtain a copy of the Legal authority?
      IFAC can obtain copies of the documents from SEBI website www.sebi.gov.in.


    36. Is the Legal authority available in English?
      Yes   No


    37. Are there any additional or alternative financial statement reporting requirements for listed entities that are not described in your answer to Question 28?
      Yes   No
      If YES, please describe the requirement:
      The Companies Act, 1956 and the listing requirements prescribe the preparation of half-yearly and quarterly financial statements for listed companies.


    38. Are there any additional auditing requirements that apply to listed entities other than those described in your answer to Question 29 (e.g., additional GAAS requirements, additional independence requirements, requirements to report to those charged with governance, etc.)?
      Yes   No
      If YES, please describe the requirement:


    39. Who appoints the statutory auditors of listed entities?
      Please check all that apply.
      Shareholders   Management
      Board of directors   Other (please specify): In the case of government Companies, the appointment of auditors is made by the Comptroller & Auditor General of India.
      Audit committee   Other (please specify):
      Government agency   Other (please specify):


    40. Are auditors who perform audits of listed entities appointed for a specified period?
      Yes   No
      If YES, please indicate the term of appointment: 1 Year(s)


    41. Are joint auditors required for audits of listed entities?
      Yes   No
      If YES, please describe the requirement:
      The Act as such does not mandate that each company must have joint auditors. Rather the Companies Act, 1956 provides discretion to the companies to appoint joint auditors. The practice of appointing more than one auditor to conduct audit is in vogue in India since long. The banking companies, insurance companies, government companies and other large sized companies in India generally appoint joint auditors.


    42. Is rotation of the auditor or audit firm for audits of listed entities required?
      Yes   No
      If YES, please describe the requirement:



    Section 5 -- Auditing Standards


    Responses to this section will provide a description of the legal and professional framework governing audit and other assurance standards in your country. The section focuses on the establishment of such standards. Please indicate the role your organization plays within this framework.

    Section 5A -- Statutory Framework


    43. Please provide the name of the Legal authority and/or self-regulatory rules that establish audit and other assurance standards in your country, the date of the last amendment of such authority or rules and the name of body responsible for setting audit and other assurance standards. If the standards are different for different entities (e.g., listed entities, private companies, governmental bodies, not-for-profit organizations, etc.), please specify the details that apply to each:
      Type of entity Name of
      applicable
      legal
      authority
      Date of last
      amendment
      (e.g. MM/YYYY 06/2001)
      Name of body responsible
      for setting audit and
      other assurance standards
      Listed entity Chartered Accountants Act 1949 (Section 15) Auditing and Assurance Standards Board
      Other (please describe) All Companies Chartered Accountants Act 1949 (Section 15) Auditing and Assurance Standards Board
      Other (please describe)
      Other (please describe)

      a. How can IFAC obtain copies of these documents?

      The Auditing and Assurance Standards Board (a non-standing committee of the Council of ICAI) formulates the auditing and assurance standards, which are issued under the authority of the Council of ICAI. The Auditing and Assurance Standards are required to be complied with in an audit of financial statements. The auditing standards are not different for different entities. The Institute draws the legal authority of issuing auditing and assurance standards from section 15 of the Chartered Accountants Act, 1949 (an Act of the Parliament of the Republic of India). It may be noted that no other legal or government authority is responsible for formulation of auditing standards in India.

      A copy of the Handbook of Auditing Pronouncements (2003) and the Chartered Accountants Act 1949 has been forwarded to IFAC.


      b. Are the documents available in English?
      Yes   No


    Section 5B -- Standard-Setting (Auditing and Assurance Standards Board)


    44. For Auditing and Assurance Standards Board, please indicate the nature of the body (i.e., whether it is part of a government ministry or department, an agency appointed by government, a private organization established by the profession, or other [please describe]) and the name of the standards.
      a. Nature of body

      Auditing and Assurance Standards Board (AASB) of ICAI sets Auditing and Assurance Standards in India, which are then notified under the authority of the Council of ICAI.

      AASB is a Non Standing Committee of ICAI.

      AASB was earlier known as the Auditing Practices Committee.


      b. Name of standards

      Auditing and Assurance Standards


    45. How many voting members does the standard-setting body have?
      16


    46. Are the members of the standard-setting body involved on a voluntary basis or employed by the standard-setting body?
      Voluntary  
      Employed  
      Both - Please describe:


    47. What are the criteria considered in selecting members of the standard-setting body (e.g., best person for the job, sector of the profession, private and public members, academic, geographical representation, etc.)?
      The composition of the Auditing and Assurance Standards Board (AASB) is quite broad-based. Apart from the members of the Council of ICAI, the composition of the AASB of ICAI contains representatives of various interest groups, such as industry, government departments, regulators, academicians, etc, who are selected on the basis of the following criteria:

      (a) Best person for the job;
      (b) Sector of the profession; and
      (c) Geographical representation.


    48. Who appoints these members (e.g., member body, government, user, regulator, etc.)?
      Question 46 and 48:

      The AASB is a non-standing Committee of the ICAI Council and in terms of the authority given to the President by the Council, its constitution is determined on year to year basis. The AASB consists of members amongst the Council and the co-opted members and this induction is not in the nature of employment but for associating them to the cause of the Committee as Council members/members of ICAI.

      The AASB has also the benefit of the professional expertise of the special invitees, which are called to participate in the deliberations of the Board. These special invitees are called in the nature of consultants and do not carry any voting right.


    49. What is the term of appointment for members?
      1 Year(s)


    50. For how many years has the standard-setting body been in existence?
      22 Year(s)


    51. Please indicate the budget in US$ of the standard-setting body for the last fiscal year:
      Note: Please enter a whole number using commas (e.g., 4,000,000)

      110,000

      Please enter the exchange rate used to calculate this number.

      Note: Please enter a decimal amount (e.g., 4.0027)

      45.0



    52. To what entity is the standard-setting body accountable?
      AASB is accountable to Council of ICAI.


    53. Describe the due process followed by the standard-setting body. Please include explanations of the following:
    1. public exposure of standards



    2. accessibility of meetings (i.e., public or private)

      Private; however, the representatives of the relevant interest groups to which the standard relates are invited to gather and assess their perspective.

    3. approval process for final standards (i.e., majority required to approve final standards)



    4. other relevant due process activities



    54. Approximately how many days per year does the standard-setting body meet in full session (including teleconferences)?
      12 Day(s)



    Section 6 -- Ethics


    Responses to questions in this section will provide a description of the legal and professional framework governing ethics standards for accountants in your country. This section focuses on the establishment of such standards. Please indicate the role your organization plays within this framework.

    Section 6A -- Statutory Framework


    55. For each of the following types of professionals, please indicate the name of the Legal authority and/or self-regulatory rules establishing ethics standards for accountants and auditors in your country, the date of the last amendment of such authority or rules and the name of body responsible for setting the ethics standards.
      Type of professional covered Name of
      applicable
      legal
      authority
      Date of last
      amendment
      (e.g. MM/YYYY 06/2001)
      Name of body responsible
      for setting ethics standards
      Professional Accountants in Public Practice Chartered Accountants Act 1949; Chartered Accountants Regulations 1988; ICAI Code of Ethics Council of the ICAI
      Professional Accountants in Business Chartered Accountants Act 1949; Chartered Accountants Regulations 1988; ICAI Code of Ethics Council of the ICAI
      Professional Accountants in the Public Sector Chartered Accountants Act 1949; Chartered Accountants Regulations 1988; ICAI Code of Ethics Council of the ICAI
      Other (please describe)

      a. How can IFAC obtain copies of these documents?

      ICAI can provide a copy of the Code of Ethics, if required.

      b. Are the documents available in English?
      Yes   No


    Section 6B -- Standard-Setting (Council of the ICAI)


    56. For Council of the ICAI, please indicate the nature of the body (i.e., whether it is part of a government ministry or department, an agency appointed by government, a private organization established by the profession, or other [please describe]) and the name of the standards.
      a. Nature of body

      1. The Chartered Accountants Act, 1949 Enacted by Parliament of India
      2. The Chartered Accountants Regulations, 1988 Enacted by Parliament of India
      3. Code of Ethics by the Council of ICAI


      b. Name of standards

      The Chartered Accountants Act, 1949 includes two schedules prescribing circumstances of professional misconduct for ICAI members. The Chartered Accountants Regulations, 1988 are framed under the Chartered Accountants Act, 1949. The decisions of the Courts and the Council of ICAI are part of the Code of Ethics. Code of Ethics further consists of notifications, announcements, directions, guidelines, clarifications, etc issued by the Council of ICAI from time to time. Code of ethics is a document for the guidance of members to ensure independence, integrity, excellence and objectivity.


    57. How many voting members does the standard-setting body have?
      30


    58. Are the members of the standard-setting body involved on a voluntary basis or employed by the standard-setting body?
      Voluntary  
      Employed  
      Both - Please describe:


    59. What are the criteria considered in selecting members of the standard-setting body (e.g., best person for the job, sector of the profession, private and public members, academic, geographical representation, etc.)?
      They are voluntary members, who join the Council of the Institute through process of election, which is held every three years. Further out of 30 members, six members are nominated by the Government of India.

      The ICAI Council is composed of 30 members out of which 24 members are elected by the members of ICAI amongst fellow members and 6 persons are nominated by the Government of India.


    60. Who appoints these members (e.g., member body, government, user, regulator, etc.)?
      1. 24 Persons as elected by ICAI members in the triennial elections
      2. 6 Persons as nominated by the Government of India on Council of ICAI.


    61. What is the term of appointment for members?
      3 Year(s)


    62. For how many years has the standard-setting body been in existence?
      55 Year(s)


    63. Please indicate the budget in US$ of the standard-setting body for the last fiscal year:
      Note: Please enter a whole number using commas (e.g., 4,000,000)

      Not separately budgeted

      Please enter the exchange rate used to calculate this number.

      Note: Please enter a decimal amount (e.g., 4.0027)

      N/A



    64. To what entity is the standard-setting body accountable?
      ICAI, being established under an Act of the Parliament, is accountable to the Government of India.


    65. Describe the due process followed by the standard-setting body. Please include explanations of the following:
    1. public exposure of standards

      The Chartered Accountants Act, 1949 is an Act of the Parliament and the Chartered Accountants Regulations, 1988 are framed thereunder. Thus amendments in the Act and the Regulations are notified after due public exposure. The Code of Ethics being a compilation of the decisions of the ICAI Council and the Courts in respect of the various provisions of the abovesaid Act and Regulations, is not exposed to public for comments.

    2. accessibility of meetings (i.e., public or private)

      Private

    3. approval process for final standards (i.e., majority required to approve final standards)

      The approval process for the Code of Ethics includes prior consideration of the matter by one of the non-standing Committees of the ICAI Council namely the Committee on Ethical Standards and Unjustified Removal of Auditors (CESURA).

    4. other relevant due process activities

      The ICAI Council meets as frequently as it can. For instance the Council met nine times, the meetings spanning over 26 days during the financial year 2003-2004. The meeting of the Committee on Ethical Standards and Unjustified Removal of Auditors (CESURA) spanned over 4 days during the period.


    66. Approximately how many days per year does the standard-setting body meet in full session (including teleconferences)?
      Day(s)



    Section 7 -- Education


    Responses to questions in this section will provide a description of how education requirements for the profession are established. Please indicate the role your organization plays within this process.

    Section 7A -- Education Requirements


    67. Please describe in general terms the education system in your country including the different stages of education from early childhood education through to tertiary level study. Please indicate which aspects / levels are compulsory as part of the national education system:


    68. Is there a legal authority or regulation that specifies the requirements for an individual to operate as an accountant or auditor in your country?
      Yes   No

      If YES, please provide the name and describe the requirements, including any relating to education, experience or qualifications.

      Yes, there are specific requirements for individuals to render services as auditors in India.

      As per the Companies Act, 1956, a person shall not be qualified for appointment as auditor of a company unless he is a chartered accountant within the meaning of the Chartered Accountants Act, 1949. As per Chartered Accountants Act, 1949 a Chartered Accountant is a person, who is a member of ICAI.


    69. Please select from below all the relevant key levels of requirements to obtain certification from your member body (i.e. to qualify as a certified or chartered accountant) and provide a general description of the requirement.
      Academic requirements
      The minimum academic requirements for entry into the Chartered Accountancy Course are:

      (a) those joining after 10+2 or graduates less than the specified marks shall have to be compulsory Professional Education Course I.
      (b) Graduates with more than specified marks.
      Professional examinations
      Practical experience
      Under the scheme effective from October 1, 2001, a student becomes eligible for registration as an articled/ audit trainee for practical training of three years only after the successful completion of the Professional Education (Examination II) and after attending the Compulsory Computer Training Programme (CTP) for 250 hours.
      Final qualifying examination
      Along with Practical Training, the student will have to undergo theoretical education for the Final Course and appear in the Final Examination during the last six months of the practical training or thereafter. This part of the course is concerned with imparting advanced knowledge of the relevant subjects and their application. During the articleship training the student has to undergo theoretical education and shall be required to appear for such periodical tests as may be prescribed by the Board of Studies, in order to qualify for appearing in the Final Examinations. On completion of this advanced stage , he can, subject to fulfillment of certain conditions , appear in the Final examinations and qualify in that to apply for the membership of the Institute.
      Other (please describe) Course on General Management & Communication Skill
      On completion of the practical training and before applying for membership of ICAI, the students are required to attend a course on General Management and Communication Skills or any other course as specified by the Council, on successful completion of Final examination.


    70. Which of the following arrangements best describes who establishes the education requirements for the accounting profession in your country? Please select one option.
      A government ministry, department or agency establishes education requirements for the accounting profession with no additional requirements set by the member body(ies).
      A government ministry, department or agency establishes minimum education requirements for the accounting profession, and member body(ies) supplement these requirements.
      Member body(ies) establishes the education requirements for the accounting profession.
      Other (please describe)


    71. Please provide the name(s) of the relevant body in the government ministry, department, agency and / or member body who establishes the education requirements.
      The Council of ICAI is empowered to establish educational requirements under the framework of the Chartered Accountants Act, 1949 and the Regulations framed thereunder subject to the concurrence of the Ministry of Company Affairs, Government of India.

      The approval on such education requirements as finalised by the ICAI Council upon recommendation of the Board of Studies/Committee on Review of Education and Training is done through the process of amendment in the Chartered Accountant Regulations, 1988.

      ICAI has a Non-Sanding Committee christened the Board of Studies, which is the nodal Committee for pronouncing education and training requirements for Chartered Accountancy students. As ICAI feels that the Chartered Accountancy as a dynamic profession, has to be in line with international development, it has constituted a special purpose Committee namely the Committee for Review of Education and Training (CRET) to undertake review of the mechanism in place at reasonable intervals (Infact the Committee existed earlier as well when based upon its futuristic recommendations, the ICAI curriculum was revised to the form and manner as it stands today.). The Committee interacts with members in practice as well as industry, regulators, government and academicians to suggest appropriate revision in education and training requirements, whenever so required.

    1. A general description of the role of the relevant body(ies) including how it operates and its due process in establishing the education requirements.

    2. How many voting members does the relevant body(ies) have

      ICAI Council has thirty members.

      The ICAI Council is composed of 30 members out of which 24 members are elected by the members of ICAI amongst fellow members and 6 persons are nominated by the Government of India.

    3. Are the members of the relevant body(ies) involved on a voluntary basis or employed by the standard-setting body?
      Voluntary  
      Employed  
      Both - Please describe:

    4. For how many years has the body been in existence?

      Year(s)


    72. How would you describe the authority that the education requirements have?
      Requirements are legally-based
      Requirements are set in the constitution, by-laws or other rules of the relevant body(ies).
      Requirements are set in member body(ies) policy document(s).
      Other (please describe)

    72 a. How can IFAC obtain copies of these documents?
      The requirements are prescribed in the Chartered Accountants Regulations, 1988, a copy of which is enclosed.

    72 b. Are these documents available in English?
      Yes   No


    73. Are the education requirements for accountants and auditors the same throughout your country, or do they differ among regions, provinces or states?
      Same   Different
      If different, please briefly describe the main differences:
      The education requirements for acquiring the Chartered Accountancy qualification and to be eligible to conduct audit of financial statements are similar throughout the country.


    74. Please indicate the scenario that best describes who delivers the education and examination process for members of the profession. Please only select one option.
      The education program and final examination are delivered by the member body.
      The education program and final examination are delivered by the member body and other education institutions (e.g., universities, colleges, and others).
      The education program and final examination are delivered by education institutions (e.g., universities, colleges, and others).
      Other (please explain)


    75. Once qualified as a member of your professional body, can members offer their services directly to the public?
      Yes   No



    Section 7B -- Licensing


    76. Are there licensing requirements for auditors in your country?
      Yes (continue with Question 77)   No (proceed to Section 8)


    77. Who sets the requirements to obtain a license?
      The requirement to obtain license have been laid in the Chartered Accountants Act, 1949 and the Chartered Accountant Regulations, 1988; as enacted by the Parliament of Union of India.


    78. What are the requirements to obtain a license (please select all relevant requirements.)?
      Academic study specific for obtaining a license
      Practical experience
      Licensing examination
      Final qualifying examination
      Other (please describe)
      A member of the Institute can obtain license (certificate of practice) by applying in the appropriate form and payment of prescribed fees to ICAI.

      With respect to the specific requirements:

      Academic study: Completion of Chartered Accountancy Final Examination conducted by ICAI semi-annually.)

      Practical experience: Compulsory three years training, which is an integral component of Chartered Accountancy Course

      Licensing examination is not required

      Other: As the license (certificate of practice) is available only to members of ICAI, it presupposes the passing of Final examination of the Institute and other requirements like completion of training, Computer Training and a Course on General Management & Communication Skills (GMCS) as condition for membership.


    79. Are there ongoing requirements to retain a license?
      Yes   No

      If YES, please select all relevant requirements.
      Continuing professional development
      Re-examination
      Other (please specify):


    80. What entity grants the license?
      ICAI is the only authority, which grants the licence (certificate of practice).

      With respect continuing education:
      A member in practice has to obtain to his credit a CPE Credit of minimum 15 hours during 2004 (and 20 hours during 2005). For members, who are not in practice CPE for 10 hours per calendar year is required to be undergone by them w.e.f. 1st January 2005. At present however the CPE credit is recommendatory for ICAI members, who are not in practice.

      The above requirements are not applicable for members, who are above 65 years of age and those who have enrolled during the year itself.


    81. Describe any additional licensing requirements for auditors of listed entities (e.g., additional education requirements, registration, etc.).
      A member of the Institute who has taken certificate of practice is entitled to do audit of all classes of entities and there is no distinct requirement as such for licensing of auditors of listed entities.



    Section 8 -- Public Sector Accounting Standards


    Responses to this section will provide a description of the legal and professional framework governing public sector accounting standards in your country. The section focuses on the establishment of such standards. Please indicate, where appropriate, the role of your organization within this framework.

    Section 8A -- Statutory Framework


    82. Please provide the name of the Legal authority and/or self-regulatory rules establishing public sector accounting standards in your country, the date of last amendment and the name of the body responsible for setting public sector accounting standards. If the standards are different for different entities (e.g., whole of government, ministry/department, statutory authority/agency, profit entity owned by government, state governments, local governments, other [please specify]), please specify the details that apply to each.
      Type of entity Name of
      legal
      authority
      Date of last
      amendment
      (e.g. MM/YYYY 06/2001)
      Name of body responsible
      for setting public sector
      accounting standards
      Whole of government Article 150 was last amended by the Constitution (Forty-fourth Amendment) Act, 1978. Government Accounting Standards Advisory Board constituted by the Comptroller & Auditor General of India.
      Ministry/department Article 150 was last amended by the Constitution (Forty-fourth Amendment) Act, 1978. Government Accounting Standards Advisory Board constituted by the Comptroller & Auditor General of India.
      Statutory authority/agency (In India, statutory authorities/agencies are governed by separate Acts and are, therefore subject to the requirements of the respective Acts.) -
      Profit entity owned by government (Profit entities owned by government carry on commercial, industrial or business activities. Therefore, Accounting Standards applicable to private sector enterprises are also applicable to those entities)ICAI issues Accounting Standards generally for pro Section 15 of The Chartered Accountants Act, 1949 was last amended in 1959. Section 211 (3A) of the Companies Act, 1956, was inserted by the Companies (Amendment) Act, 1999, w.r.e.f. 31st. October, 1998 and not amended thereafter. Accounting Standards Board of ICAI.
      State governments Article 150 was last amended by the Constitution (Forty-fourth Amendment) Act, 1978. Government Accounting Standards Advisory Board constituted by the Comptroller & Auditor General of India.
      Local governments ICAI would issue Accounting Standards for local governments. The power of formulation of the Standards for various enterprises is derived by ICAI by virtue of Section 15 of The Chartered Accountants Act, 1949. Section 15 of The Chartered Accountants Act, 1949 was last amended in 1959. Sub-Committee of the Accounting Standards Board on Accounting Standards for Governmental Bodies.
      Other (please describe)
      Other (please describe)

      a. How can IFAC obtain copies of these documents?

      1. The Indian Government Accounting Standards are yet to be issued by the Comptroller and Auditor General of India and will be available at www.gasab.nic.in, when issued. At present some exposure drafts have been issued and available on their site.

      2. The Accounting Standards issued by the ICAI applicable to profit entities owned by government are available at www.icai.org.

      3. The Technical Guide on Accounting and Financial Reporting by Urban Local Bodies issued by the Institute which has been issued as a precursor to the accounting standards in this area, can be provided by the ICAI.


      b. Are the documents available in English?
      Yes   No


    Section 8B -- Standard-Setting (Government Accounting Standards Advisory Board constituted by the Comptroller & Auditor General of India.)


    83. For Government Accounting Standards Advisory Board constituted by the Comptroller & Auditor General of India., please indicate the nature of the body (i.e., whether it is part of a government ministry or department, an agency appointed by government, a private organization established by the profession, or other [please describe]) and the name of the standards.
      a. Nature of body

      Constituted by Comptroller & Auditor General of India (under Article 150 of the Constitution of India)

      b. Name of standards

      Indian Government Accounting Standards


    84. How many voting members does the standard-setting body have?
      (1) Government Accounting Standards Advisory Board- 13 members


    85. Are the members of the standard-setting body involved on a voluntary basis or employed by the standard-setting body?
      Voluntary  
      Employed  
      Both - Please describe: One member (Member Secretary to (GASAB) is employed by the GASAB. Out of the remaining 12 members, 11 members are employed in different government departments and are required to attend the meeting of GASAB, whenever held. The remaining one member is the President of ICAI who is involved on a voluntary basis.


    86. What are the criteria considered in selecting members of the standard-setting body (e.g., best person for the job, sector of the profession, private and public members, academic, geographical representation, etc.)?
      Government Accounting Standards Advisory Board comprises Deputy Comptroller and Auditor General (Accounts) as chairperson and representatives of other government departments like Comptroller General of Accounts, Railways, Reserve Bank of India, Ministry of Finance, etc. The objective is to give representation to state and union government departments considering them the best persons for the job.


    87. Who appoints these members (e.g., member body, government, user, regulator, etc.)?
      Members are appointed by Comptroller and Auditor General of India.

      There is no specific term for the members of the Government Accounting Standards Advisory Board. If a member ceases to hold the position in the relevant government department by virtue of which he was a member of GASAB, he will automatically cease to be a member of the GASAB and the new person who occupies that position will become the member of GASAB.


    88. What is the term of appointment for members?
      Year(s)


    89. For how many years has the standard-setting body been in existence?
      2 Year(s)


    90. Please indicate the budget in US$ of the standard-setting body for the last fiscal year:
      Note: Please enter a whole number using commas (e.g., 4,000,000)

      Covered in the budget of Comptroller & Auditor General of India (the figures are not available with us)

      Please enter the exchange rate used to calculate this number.

      Note: Please enter a decimal amount (e.g., 4.0027)

      Rupees 45.000=US$ 1



    91. To what entity is the standard-setting body accountable?
      Accountable to the Comptroller and Auditor General of India.


    92. Describe the due process followed by the standard-setting body. Please include explanations of the following:
    1. public exposure of standards

      Exposure drafts prepared by GASAB are issued for public comments.

    2. accessibility of meetings (i.e., public or private)

      Private meetings are held by GASAB.

    3. approval process for final standards (i.e., majority required to approve final standards)

      The draft finalised by mutual consensus of the members of GASAB is sent for the approval of the Comptroller & Auditor General of India and finally for the consideration by the President of India for notification.

    4. other relevant due process activities

      None to our Information


    93. Approximately how many days per year does the standard-setting body meet in full session (including teleconferences)?
      4 Day(s)


    Section 8B -- Standard-Setting (Accounting Standards Board of ICAI.)


    83. For Accounting Standards Board of ICAI., please indicate the nature of the body (i.e., whether it is part of a government ministry or department, an agency appointed by government, a private organization established by the profession, or other [please describe]) and the name of the standards.
      a. Nature of body

      Established by the Council of ICAI

      b. Name of standards

      Accounting Standards


    84. How many voting members does the standard-setting body have?
      The Accounting Standards Board of ICAI has 17 members at present. The Sub-Committee on Accounting Standards for Governmental Bodies comprises 8 members.


    85. Are the members of the standard-setting body involved on a voluntary basis or employed by the standard-setting body?
      Voluntary  
      Employed  
      Both - Please describe:


    86. What are the criteria considered in selecting members of the standard-setting body (e.g., best person for the job, sector of the profession, private and public members, academic, geographical representation, etc.)?
      The members of the Accounting Standards Board of ICAI are nominated by the Council of ICAI and the composition also includes the nominees of various stakeholders and interest groups.
      The Accounting Standards Board (ASB) of ICAI comprises of members of ICAI Council and representatives of various interest groups such as industry, government departments, regulators, academicians, etc. The composition of ASB is set out in the Preface to the Statements of Accounting Standards (Paragraph 1.2). A copy of the Preface is enclosed. The objective is to give representation to various interest groups having stake in the financial reporting considering the best persons for the job. The Sub-Committee on Accounting Standards for Governmental Bodies of the ASB of ICAI comprises the members of the ASB and representatives of various interest groups, such as, government departments, academicians and Chartered Accountants considering the best persons for the job.


    87. Who appoints these members (e.g., member body, government, user, regulator, etc.)?
      The members of the Accounting Standards Board are nominated by ICAI out of its Council Members. Members are also nominated by the organizations representing various groups. The composition of the Sub-Committee on Accounting Standards for Governmental Bodies is determined by the Accounting Standards Board and consists of the ASB members and the co-opted representatives of the Government and Governmental Bodies.


    88. What is the term of appointment for members?
      1 Year(s)


    89. For how many years has the standard-setting body been in existence?
      27 Year(s)


    90. Please indicate the budget in US$ of the standard-setting body for the last fiscal year:
      Note: Please enter a whole number using commas (e.g., 4,000,000)

      167,000

      Please enter the exchange rate used to calculate this number.

      Note: Please enter a decimal amount (e.g., 4.0027)

      45.000



    91. To what entity is the standard-setting body accountable?
      Accountable to the Council of ICAI


    92. Describe the due process followed by the standard-setting body. Please include explanations of the following:
    1. public exposure of standards

      Once the preliminary draft of a new/revised Accounting Standard is finalised by the Accounting Standards Board, the same is circulated among the various interest groups and the representatives of these interest groups are invited at the relevant meeting of the Board to express their views. On the basis of consideration of comments and views expressed at the meeting, the exposure draft of a new/revised Accounting Standard is finalised. The exposure draft of a new/revised accounting standard is exposed for public comments through the website and the Journal of the Institute. Wide publicity of the issuance of the exposure draft is given in the media. Besides this, copies of the exposure draft are sent to various interest groups. In case of industry-specific projects, such as leases, construction contracts, etc, the representatives of the relevant industry are invited after the issuance of the exposure draft at the meetings of the Board to express their views on the proposals contained in the exposure drafts. Normally, the exposure period is 45-60 days depending on the nature of the project.

    2. accessibility of meetings (i.e., public or private)

      Before finalisation of the exposure draft of a new/revised accounting standard, representative of various interest groups are invited at the meeting of the Board to express their views. Besides this, in case of industry-specific projects, such as leases, construction contracts, the representatives of the relevant industry are invited after the issuance of the exposure draft at the meeting of the Board to express their views on the proposals contained in the exposure drafts. The Accounting Standards issued by ICAI have the authority of the law in terms of the Indian Companies Act, 1956, which has constituted an advisory Committee in the name and style of the National Advisory Committee on Accounting Standards (NACAS). It may further be added here that NACAS has so far submitted its recommendations for notification of 25 Accounting Standards issued by ICAI by the Government of India. The remaining three Accounting Standards, which are currently in force, are under consideration of the Advisory Committee.

    3. approval process for final standards (i.e., majority required to approve final standards)

      The Council of the ICAI approves the accounting standard formulated by the ASB. Normally, the accounting standards are approved by the Council with consensus of all members concerned. However, as a general provision, Regulation 166 of The Chartered Accountants Regulations, 1988 provides that at a meeting of the Council, a resolution shall be passed by a majority of the members present unless otherwise required by the Act or these Regulations, and in the case of equality of votes, the Chairman of the meeting shall have a casting vote.

    4. other relevant due process activities

      The accounting standards setting process of the Accounting Standards Board of ICAI is detailed in the Preface to the Statements of Accounting Standards (paragraph 5).


    93. Approximately how many days per year does the standard-setting body meet in full session (including teleconferences)?
      14 Day(s)


    Section 8B -- Standard-Setting (Sub-Committee of the Accounting Standards Board on Accounting Standards for Governmental Bodies.)


    83. For Sub-Committee of the Accounting Standards Board on Accounting Standards for Governmental Bodies., please indicate the nature of the body (i.e., whether it is part of a government ministry or department, an agency appointed by government, a private organization established by the profession, or other [please describe]) and the name of the standards.
      a. Nature of body

      Established by the Council of ICAI.

      b. Name of standards

      A Technical Guide on Accounting and Financial Reporting by Urban Local Bodies has been issued.


    84. How many voting members does the standard-setting body have?
      The Sub-Committee on Accounting Standards for Governmental Bodies comprises 8 members.


    85. Are the members of the standard-setting body involved on a voluntary basis or employed by the standard-setting body?
      Voluntary  
      Employed  
      Both - Please describe:


    86. What are the criteria considered in selecting members of the standard-setting body (e.g., best person for the job, sector of the profession, private and public members, academic, geographical representation, etc.)?
      The Sub-Committee on Accounting Standards for Governmental Bodies of the ASB of ICAI comprises the members of the ASB and representatives of various interest groups, such as, government departments, academicians and Chartered Accountants considering the best persons for the job.


    87. Who appoints these members (e.g., member body, government, user, regulator, etc.)?
      The composition of the Sub-Committee on Accounting Standards for Governmental Bodies is determined by the Accounting Standards Board and consists of the ASB members and the co-opted representatives of the Government and Governmental Bodies.


    88. What is the term of appointment for members?
      1 Year(s)


    89. For how many years has the standard-setting body been in existence?
      5 Year(s)


    90. Please indicate the budget in US$ of the standard-setting body for the last fiscal year:
      Note: Please enter a whole number using commas (e.g., 4,000,000)

      Covered in the budget for the ASB

      Please enter the exchange rate used to calculate this number.

      Note: Please enter a decimal amount (e.g., 4.0027)

      45.000



    91. To what entity is the standard-setting body accountable?
      Accountable to the Council of ICAI.


    92. Describe the due process followed by the standard-setting body. Please include explanations of the following:
    1. public exposure of standards

      Once the preliminary draft of a new/revised Accounting Standard is finalised by the Accounting Standards Board, the same is circulated among the various interest groups and the representatives of these interest groups are invited at the relevant meeting of the Board to express their views. On the basis of consideration of comments and views expressed at the meeting, the exposure draft of a new/revised Accounting Standard is finalised. The exposure draft of a new/revised accounting standard is exposed for public comments through the website and the Journal of the Institute. Wide publicity of the issuance of the exposure draft is given in the media. Besides this, copies of the exposure draft are sent to various interest groups. In case of industry-specific projects, such as leases, construction contracts, etc, the representatives of the relevant industry are invited after the issuance of the exposure draft at the meetings of the Board to express their views on the proposals contained in the exposure drafts. Normally, the exposure period is 45-60 days depending on the nature of the project.

    2. accessibility of meetings (i.e., public or private)

      Before finalisation of the exposure draft of a new/revised accounting standard, representative of various interest groups are invited at the meeting of the Board to express their views. Besides this, in case of industry-specific projects, such as leases, construction contracts, the representatives of the relevant industry are invited after the issuance of the exposure draft at the meeting of the Board to express their views on the proposals contained in the exposure drafts. The Accounting Standards issued by ICAI have the authority of the law in terms of the Indian Companies Act, 1956, which has constituted an advisory Committee in the name and style of the National Advisory Committee on Accounting Standards (NACAS). It may further be added here that NACAS has so far submitted its recommendations for notification of 25 Accounting Standards issued by ICAI by the Government of India. The remaining three Accounting Standards, which are currently in force, are under consideration of the Advisory Committee.

    3. approval process for final standards (i.e., majority required to approve final standards)

      The Council of the ICAI approves the accounting standard formulated by the ASB. Normally, the accounting standards are approved by the Council with consensus of all members concerned. However, as a general provision, Regulation 166 of The Chartered Accountants Regulations, 1988 provides that at a meeting of the Council, a resolution shall be passed by a majority of the members present unless otherwise required by the Act or these Regulations, and in the case of equality of votes, the Chairman of the meeting shall have a casting vote.

    4. other relevant due process activities

      The accounting standards setting process of the Accounting Standards Board of ICAI is detailed in the Preface to the Statements of Accounting Standards (paragraph 5).


    93. Approximately how many days per year does the standard-setting body meet in full session (including teleconferences)?
      4 Day(s)



    Section 9 -- Private Sector Accounting Standards


    Responses to the questions in this section will provide a description of the legal, statutory and professional framework governing private-sector accounting standards in your country. The section focuses on the establishment of such standards. Please indicate what role your organization plays within this framework.

    Section 9A -- Statutory Framework


    94. Please provide the name of the Legal authority and/or self-regulatory rules that establish private-sector accounting standards in your country, the date of last amendment, and the name of the body responsible for setting private sector accounting standards. If the standards are different for different entities (for example, listed entities, private companies, governmental organization, not for profit organizations, etc.), please specify the requirements that apply to each.
      Type of entity Name of legal
      authority or
      applicable
      rules
      Date of last
      amendment
      (e.g. MM/YYYY 06/2001)
      Name of body responsible
      for setting private sector
      accounting standards
      Listed entity Listing Agreement (Clause 50) 08/2001 Securities and Exchange Board of India
      Other (please describe) Private companies Chartered Accountants Act 1949 Accounting Standards Board
      Other (please describe)
      Other (please describe)
      Other (please describe)

      a. How can IFAC obtain copies of these documents?

      In India, the private-sector accounting standards are formulated by the Accounting Standards Board of ICAI. The authority of formulation of the Standards is derived by ICAI by virtue of Section 15 of the Chartered Accountants Act, 1949. Further, legal recognition has been given to the accounting standards issued by ICAI by the Companies Act, 1956 through insertion of sections 211(3A) to (3C) in the Companies Act, 1956.
      Section 15 of the Chartered Accountants Act, 1949 was last amended in 1959.
      Sections 211 (3A) to (3C) were inserted by the Companies (Amendment) Act, 1999, w.r.e.f. 31st October, 1998 and are not amended thereafter. The Accounting Standards issued by the Institute are applicable to all enterprises engaged in the commercial, industrial and business activities. There are no different accounting standards for different entities as such. However, on the basis of size and public accountability, exemptions/relaxations form certain accounting standards have been given to Small and medium sized enterprises.

      The Listing agreement can be obtained from SEBI website. A copy of the Chartered Accountant Act, 1949 is enclosed.


      b. Are the documents available in English?
      Yes   No


    Section 9B -- Standard-Setting (Securities and Exchange Board of India)


    95. For Securities and Exchange Board of India, please indicate the nature of the body (i.e., whether it is part of a government ministry or department, an agency appointed by government, a private organization established by the profession, or other [please describe]) and the name of the standards.
      a. Nature of body

      SEBI requires through Clause 50 of the Listing Agreement that all listed enterprises shall mandatorily comply with all the Accounting Standards issued by the Institute of Chartered Accountants of India (ICAI) from time to time. Clause 50 was inserted in the Listing Agreement on August 31, 2001 and has not been amended thereafter.

      b. Name of standards

      Refer to the SEB website for additional information and responses to relating to Q96 to Q105 for SEBI.


    96. How many voting members does the standard-setting body have?


    97. Are the members of the standard-setting body involved on a voluntary basis or employed by the standard-setting body?
      Voluntary  
      Employed  
      Both - Please describe:


    98. What are the criteria considered in selecting members of the standard-setting body (e.g., best person for the job, sector of the profession, private and public members, academic, geographical representation, etc.)?


    99. Who appoints these members (e.g., member body, government, user, regulator, etc.)?


    100. What is the term of appointment for members?
      Year(s)


    101. For how many years has the standard-setting body been in existence?
      1 Year(s)


    102. Please indicate the budget in US$ of the standard-setting body for the last fiscal year:
      Note: Please enter a whole number using commas (e.g., 4,000,000)

      Please enter the exchange rate used to calculate this number.

      Note: Please enter a decimal amount (e.g., 4.0027)



    103. To what entity is the standard-setting body accountable?


    104. Describe the due process followed by the standard-setting body. Please include explanations of the following:
    1. public exposure of standards



    2. accessibility of meetings (i.e., public or private)



    3. approval process for final standards (i.e., majority required to approve final standards)



    4. other relevant due process activities



    105. Approximately how many days per year does the standard-setting body meet in full session (including teleconferences)?
      14 Day(s)


    Section 9B -- Standard-Setting (Accounting Standards Board)


    95. For Accounting Standards Board, please indicate the nature of the body (i.e., whether it is part of a government ministry or department, an agency appointed by government, a private organization established by the profession, or other [please describe]) and the name of the standards.
      a. Nature of body

      Accounting Standards Board of ICAI

      b. Name of standards

      Accounting Standards


    96. How many voting members does the standard-setting body have?
      17


    97. Are the members of the standard-setting body involved on a voluntary basis or employed by the standard-setting body?
      Voluntary  
      Employed  
      Both - Please describe:


    98. What are the criteria considered in selecting members of the standard-setting body (e.g., best person for the job, sector of the profession, private and public members, academic, geographical representation, etc.)?
      The Accounting Standards Board (ASB) of ICAI comprises representatives of various interest groups such as industry, government departments, regulators, academicians, etc. The composition of ASB is set out in the Preface to the Statements of Accounting Standards (Paragraph 1.2). A copy of the Preface is enclosed. The objective is to give representation to various interest groups having stake in the financial reporting considering the best persons for the job.


    99. Who appoints these members (e.g., member body, government, user, regulator, etc.)?
      The elected members of ICAI Council represented on ASB are appointed by ICAI. The other members are nominated by organizations representing various interest groups.


    100. What is the term of appointment for members?
      1 Year(s)


    101. For how many years has the standard-setting body been in existence?
      27 Year(s)


    102. Please indicate the budget in US$ of the standard-setting body for the last fiscal year:
      Note: Please enter a whole number using commas (e.g., 4,000,000)

      167,000

      Please enter the exchange rate used to calculate this number.

      Note: Please enter a decimal amount (e.g., 4.0027)

      45.000



    103. To what entity is the standard-setting body accountable?
      The Accounting Standards Board of ICAI is responsible to Council of ICAI.


    104. Describe the due process followed by the standard-setting body. Please include explanations of the following:
    1. public exposure of standards

      Once the preliminary draft of a new/revised Accounting Standard is finalised by the Accounting Standards Board, the same is circulated among the various interest groups and the representatives of these interest groups are invited at the relevant meeting of the Board to express their views. On the basis of consideration of comments and views expressed at the meeting, the exposure draft of a new/revised Accounting Standard is finalised. The exposure draft of a new/revised accounting standard is exposed for public comments through the Web-Site and the Journal of the Institute. Wide publicity of the issuance of the exposure draft is given in the media. Besides this, copies of the exposure draft are sent to various interest groups. In case of industry-specific projects, such as leases, construction contracts, etc, the representatives of the relevant industry are invited after the issuance of the exposure draft at the meetings of the Board to express their views on the proposals contained in the exposure drafts. Normally, the exposure period is 45-60 days depending on the nature of the project.

    2. accessibility of meetings (i.e., public or private)

      Before finalisation of the exposure draft of a new/revised accounting standard, representative of various interest groups are invited at the meeting of the Board to express their views. Besides this, in case of industry-specific projects, such as leases, construction contracts, the representatives of the relevant industry are invited after the issuance of the exposure draft at the meeting of the Board to express their views on the proposals contained in the exposure drafts.

    3. approval process for final standards (i.e., majority required to approve final standards)

      The Council of the ICAI approves the accounting standard formulated by the ASB. The accounting standards are approved by the Council with consensus of all members concerned. However, as a general provision, Regulation 166 of The Chartered Accountants Regulations, 1988 provides that at a meeting of the Council, a resolution shall be passed by a majority of the members present unless otherwise required by the Act or these Regulations, and in the case of equality of votes, the Chairman of the meeting shall have a casting vote.

    4. other relevant due process activities

      The accounting standards setting process of the Accounting Standards Board is detailed in the Preface to the Statements of Accounting Standards (paragraph 5).


    105. Approximately how many days per year does the standard-setting body meet in full session (including teleconferences)?
      14 Day(s)



    Section 10 -- Monitoring (Quality Assurance) and Enforcement


    Responses to the questions in this section will provide a description of the legal and professional framework governing regulation of the profession in your country. Please indicate what role your organization plays within this framework.

    Section 10A -- Securities Market Regulatory Authority


    106. Name the authority that regulates the securities market:
      Securities & Exchange Board of India


    107. What responsibilities does this organization have for monitoring and enforcing compliance with accounting, reporting or auditing requirements? Please identify the Legal authority that establishes that responsibility:
      The Securities and Exchange Board of India Act 1992 empowers the Securities and Exchange Board of India with the regulatory powers relating to the vetting & scrutiny of documents as they relate to public offers of securities. Additionally it empowers the Board to impose penal restrictions for non-compliance of various provisions.


    108. Briefly describe the role of the regulatory authority as it relates to the following:
    1. regulation of the audit profession

      Securities and Exchange Board of India does not have direct role in the regulation of audit profession in India.

    2. accounting and auditing standard-setting

      Securities and Exchange Board of India requires all listed enterprises through clause 50 of the Listing Agreement to comply with all the Accounting Standards issued by ICAI from time to time.

    3. review of financial statements prepared by listed entities, and monitoring of their compliance with the accounting and disclosure requirements

      Same as in b above.



    Section 10B -- Stock Exchange


    109. Name the four largest stock exchangers (by market capitalization) and whether it is organized as a profit or not-for-profit organization:
      Profit Not
      for
      profit
      Stock Exchange
      Bombay Stock Exchange
      National Stock Exchange
      Delhi Stock Exchange
      Calcutta Stock Exchange



    Section 10B -- Stock Exchange
    Bombay Stock Exchange Details


    110. For Bombay Stock Exchange, is there a mechanism at the stock exchange(s) for monitoring and enforcing financial reporting, accounting and auditing of listed entities?
      Yes   No

      If YES, please describe the following:

    1. How the monitoring and enforcement of financial reporting, accounting and auditing is conducted.

      However inspection and investigation of books of account may be undertaken by the Ministry of Company Affairs, Government of India under the provisions of the Companies Act, 1956. The Securities and Exchange Board of India (SEBI) is also vested with similar powers.

    2. The consequences of non-compliance with the financial reporting, accounting or auditing requirements.



    3. How enforcement actions are administered.



    Section 10B -- Stock Exchange
    National Stock Exchange Details


    110. For National Stock Exchange, is there a mechanism at the stock exchange(s) for monitoring and enforcing financial reporting, accounting and auditing of listed entities?
      Yes   No

      If YES, please describe the following:

    1. How the monitoring and enforcement of financial reporting, accounting and auditing is conducted.

      However inspection and investigation of books of account may be undertaken by the Ministry of Company Affairs, Government of India under the provisions of the Companies Act, 1956. The Securities and Exchange Board of India (SEBI) is also vested with similar powers.

    2. The consequences of non-compliance with the financial reporting, accounting or auditing requirements.



    3. How enforcement actions are administered.



    Section 10B -- Stock Exchange
    Delhi Stock Exchange Details


    110. For Delhi Stock Exchange, is there a mechanism at the stock exchange(s) for monitoring and enforcing financial reporting, accounting and auditing of listed entities?
      Yes   No

      If YES, please describe the following:

    1. How the monitoring and enforcement of financial reporting, accounting and auditing is conducted.

      However inspection and investigation of books of account may be undertaken by the Ministry of Company Affairs, Government of India under the provisions of the Companies Act, 1956. The Securities and Exchange Board of India (SEBI) is also vested with similar powers.

    2. The consequences of non-compliance with the financial reporting, accounting or auditing requirements.



    3. How enforcement actions are administered.



    Section 10B -- Stock Exchange
    Calcutta Stock Exchange Details


    110. For Calcutta Stock Exchange, is there a mechanism at the stock exchange(s) for monitoring and enforcing financial reporting, accounting and auditing of listed entities?
      Yes   No

      If YES, please describe the following:

    1. How the monitoring and enforcement of financial reporting, accounting and auditing is conducted.

      However inspection and investigation of books of account may be undertaken by the Ministry of Company Affairs, Government of India under the provisions of the Companies Act, 1956. The Securities and Exchange Board of India (SEBI) is also vested with similar powers.

    2. The consequences of non-compliance with the financial reporting, accounting or auditing requirements.



    3. How enforcement actions are administered.




    Section 10C -- Regulatory Oversight of the Accounting Profession


    111. Has an audit profession oversight body been established (e.g., to oversee the external quality assurance review process, etc.)?
      Yes   No

      If NO, proceed to the next section.

      If YES, please describe :

    1. What are the name and duties of the oversight body?



    2. The number of members on the oversight body



    3. Its powers



    4. How the oversight body conducts or oversees a program of inspections to assess the degree of compliance of each audit firm/auditor with applicable auditing standards and regulations



    5. The sanctions the oversight body may impose in the event of non-compliance



    6. How the oversight body is accountable to any public institution or body



    Section 10D -- Banks Regulatory Authority


    112. Name the authority that regulates the banks and similar financial institutions. Discuss how this authority differentiates between accounting requirements for regulatory reporting and general purpose external financial reporting:
      Reserve Bank of India regulates the operations of banks and similar financial institutions. From external financial reporting point of view, Reserve Bank of India requires the banks to follow the Accounting Standards issued by the Institute of Chartered Accountants of India apart from certain guidelines it issues on those accounting aspects which are exempted from the accounting standards and in elaboration to the principles enunciated in the accounting standards. For the regulatory requirements, it issues various circulars, guidelines, etc., in terms of which the relevant information is furnished to the Reserve Bank of India.


    113. Discuss briefly the legal requirements with respect to monitoring and enforcement by the regulatory authority of accounting and auditing standards that apply to the banks and similar financial institutions:
      Reserve Bank of India has a Department of Banking Supervision, which reviews annual reports of all banks and in case, any deviation by a bank from any guideline/circular (including on compliance with accounting standards) issued by the Reserve Bank of India is noted, then it can take action against such banks. In pursuance of powers given under section 35 of the Banking Regulation Act, 1949, the Reserve Bank at any time may, and on being directed so to do by the Central Government shall, cause an inspection to be made of any banking company and its books and accounts. Section 46(1) of the Banking Regulation Act provides that whoever, in any return, balance sheet or other document or in any information required or furnished by or under or for the purposes of any provision of this Act willfully makes a statement, which is false in any material particular, then he shall be punishable with imprisonment for a term which may extend to three years and shall also be liable to fine. Further, as per section 46 (2), if any person fails to produce any book, account or other document or to furnish any statement or information on inspection carried under section 35(2), then Reserve Bank had the power to impose a fine which may extend to two thousand rupees in respect of each offence, and if he persists in such refusal, to a further fine which may extend to one hundred rupees for everyday during which the offence continues. The Reserve bank of India does not have any power as such to monitor and enforce the auditing standards that apply to the banks and similar financial institution. However, if on an inspection of the audited financial statements of a bank or a similar financial institution, the Reserve Bank of India feels that auditors have not duly discharged his attest functions, it may refer the case to ICAI for consideration of disciplinary action against them.


    114. Briefly describe the role of the regulatory authority as it relates to the following:
    1. regulation of the audit profession

      Reserve Bank of India does not have any direct role in the regulation of the audit profession in India.

    2. accounting and auditing standard-setting

      Reserve Bank of India is represented on the Accounting Standards Board of ICAI. Further, exposure draft of every accounting standard is sent to the Reserve Bank of India before its issuance for its comments. Reserve Bank of India sends its comments, if any on such draft. Apart from this, in respect of certain matters on which the ICAI has not issued any accounting standard or any other guidance, the Reserve Bank of India prescribes norms for the banks, by issuance of circulars, prudential norms, etc. We may also add here that the Reserve Bank of India is also represented on AASB (refer to Section 5B) and National Advisory Committee on Accounting Standards (NACAS), the Committee set-up by the Government of India. The exposure draft of every auditing and assurance standard issued by the Auditing and Assurance Standard Board is specifically sent to the Reserve Bank of India for comments. Reserve Bank of India sends its comments on such draft, which are than considered by the Auditing and Assurance Standards Board.

    3. review of financial statements prepared by listed entities

      The review of financial statements prepared by listed entities is done by virtue of listing agreements entered into between stock exchanges and the listed entities. The Reserve Bank of India may suo moto undertake the review of financial statements prepared by the listed banks and similar institutions.

    4. enforcement of accounting, reporting and auditing requirements

      Reserve Bank of India requires the banks to ensure strict compliance with the Accounting Standards issued by ICAI through its circulars dated March 29, 2003 and April 30, 2004 on Guidelines on Compliance with Accounting Standards (AS) by Banks. Further, the provisions relating to Section 211 (3A) regarding compliance with the Accounting Standards applies to banking companies and accordingly, under section 227(3)(d) of the Companies Act, 1956, the statutory auditors of the banking companies are required to report about such compliance in their audit reports. ICAI also casts a duty on its members to examine whether all banks, subject to attest functions of its members, comply with the Accounting Standards issued by it and in case of any deviation, to report such deviation in their audit reports. Reserve Bank of India has no role in the enforcement of auditing requirements as the authority is vested in ICAI.



    Section 10E -- Non-Banking Financial Institutions Regulatory Authority


    115. Name the regulatory authority(ies) responsible for monitoring compliance with and enforcing accounting, reporting and auditing requirements imposed on non-banking institutions.
      The Reserve Bank of India (Regulator for banking industry in India) and Department of Company Affairs, Ministry of Company Affairs, Government of India are responsible for monitoring compliance of accounting, reporting and auditing requirements by non-banking finance companies.


    116. What is the source of Legal authority of the regulatory authority(ies)?
      Reserve Bank of India Act 1934 and the Companies Act, 1956 respectively.


    117. Briefly describe the role of the regulatory authority(ies) as it relates to the following:
    1. regulation of the audit profession

      Reserve Bank of India has no direct role in the regulation of the audit profession The Department of Company Affairs of the Ministry of Finance of the Government of India has the responsibility to monitor, inter-alia, the enforcement and monitoring of the provisions of the Chartered Accountants Act 1949. The Chartered Accountants Act 1949 and the Regulations framed thereunder prescribe the detailed mechanism to be followed in a disciplinary case. A representative of the Department of Company Affairs (who also is a member of the Council of the Institute) is also represented on the Disciplinary Committee of ICAI.

    2. accounting and auditing standard-setting

      Reserve Bank of India and Department of Company Affairs are represented on the Accounting Standards Board of ICAI. Exposure draft of every accounting standard is sent to them for their comments. These regulators may send their comments, if any on the said exposure drafts. Apart from this, in respect of certain matters on which the ICAI has not issued any accounting standard or any other guidance, the Reserve Bank of India prescribes norms for Non-banking financial institutions by issuance of prudential norms and other directions. The exposure draft of every auditing and assurance standard issued by the Auditing and Assurance Standard Board is sent to the Reserve Bank of India for comments. Reserve Bank of India sends its comments on the exposure drafts, which are then considered by the Auditing and Assurance Standards Board.

    3. review of financial statements prepared by listed entities

      The review of financial statements prepared by listed entities is done by virtue of listing agreements entered into between stock exchanges and the listed entities. The Reserve Bank of India and the Department of Company Affairs may suo moto review the financial statements of listed non-banking financial institutions.

    4. enforcement of accounting, reporting and auditing requirements

      The Reserve Bank of India has issued Non-Banking Financial Companies Prudential Norms (Reserve Bank) Directions, 1998. Clause 5 of these Directions requires that Accounting Standards and Guidance Notes issued by ICAI shall be followed in so far as they are not inconsistent with any of these directions. Further, the provisions relating to Section 211 (3A) of the Companies Act, 1956 regarding compliance with the Accounting Standards applies to non-banking financial companies and accordingly under section 227(3)(d) of the Act, the statutory auditors shall report about such compliance in their audit reports. ICAI also casts duty on its members to examine whether all non-banking financial companies, subject to attest function of its members, comply with the Accounting Standards issued by it and in case of any deviation, to report such deviation in their audit reports. Neither the Reserve Bank of India nor the Department of Company Affairs has any role in the enforcement of auditing requirements. This is done by the ICAI. These authorities may, however, prescribe additional reporting requirements for compliance by the auditors.



    Section 10F -- Insurance Companies Regulatory Authority


    118. Name the regulatory authority responsible for monitoring compliance with and enforcing accounting, reporting and auditing requirements imposed on insurance companies.
      Apart from the applicable provisions of the Companies Act, 1956, Insurance and regulatory Development Authority (IRDA) monitors compliance and enforcement of accounting, reporting and auditing requirements for insurance companies.


    119. What is the source of Legal authority of the regulatory authority(ies)?
      Insurance Act, 1938.


    120. Briefly describe the role of the regulatory authority(ies) as it relates to the following
    1. regulation of the audit profession

      The Insurance Regulatory and Development Authority has no direct role to play in the regulation of the audit profession.

    2. accounting and auditing standard-setting

      Insurance Regulatory and Development Authority (Preparation of Financial Statements and Auditors Report of Insurance Companies) Regulations, 2002 requires through its Regulation 3 that an insurer carrying on life insurance business and an insurer carrying on general insurance business shall comply with the Accounting Standards (AS) issued by ICAI, to the extent specified. Apart from this, in respect of certain matters on which ICAI has not issued any accounting standard or any other guidance, the Insurance Regulatory and Development Authority Act, 1999 provides guidance to the insurance companies. The exposure draft of every auditing and assurance standard issued by the Auditing and Assurance Standards Board is sent to the Insurance Regulatory and Development Authority for comments. The Insurance Regulatory and Development Authority sends it comments, if any on the exposure drafts, which are then considered by the Auditing and Assurance Standards Board.

    3. review of financial statements prepared by listed listed entities

      The review of financial statements prepared by listed entities is done by virtue of listing agreements entered into between stock exchanges and the listed entities.

    4. enforcement of accounting, reporting and auditing requirements

      Insurance Regulatory and Development Authority (Preparation of Financial Statements and Auditors Report of Insurance Companies) Regulations, 2002 requires through its Regulation 3 that the auditors shall express their opinion that whether the accounting policies selected by the insurer are appropriate and are in compliance with the applicable accounting standards and with the accounting principles, as prescribed in these Regulations or any order or direction issued by the Authority in this behalf. IRDA has also the authority to prescribe additional reporting requirements for compliance by the auditors. ICAI also casts a duty on its members to examine whether all insurance companies, subject to attest function of its members, comply with the Accounting Standards issued by it and in case of any deviation, to report such deviation in their audit reports.



    Section 10G -- Other Regulatory Authority


    121. Name any other regulatory authority(ies) responsible for monitoring compliance with and enforcing accounting, reporting and auditing requirements.
      N.A.


    122. What is the source of Legal authority of each regulatory authority?
      N.A.


    123. Briefly describe the role of the regulatory authority(ies) as it relates to the following
    1. regulation of the audit profession

      N.A.

    2. accounting and auditing standard-setting

      N.A.

    3. review of financial statements prepared by listed listed entities

      N.A.

    4. enforcement of accounting, reporting and auditing requirements

      N.A.



    Section 10H -- Quality Assurance


    124. Does any organization of professional accountants/auditors organize a program of quality assurance review to monitor compliance with accounting, reporting and auditing requirements?
      Yes   No

      If NO, proceed to next Section.

      If YES, briefly describe the monitoring and enforcement mechanism.



    125. Under what authority does the organization conduct the program of quality assurance review?
      Peer Review :

      The peer review is undertaken as provided in the Statement on Peer Review issued by ICAI.

      Financial Reporting Review:
      ICAI has disciplinary jurisdiction over its members and has authority to monitor the work done by its members. However, as far as enterprises are concerned, in the case of any non-compliance with any accounting standards or reporting requirements by the enterprise, the Board normally, considers whether case should be forwarded to the regulator concerned for an appropriate action.


    126. Who performs the review (e.g., one firm reviewing another firm, staff from the national professional organization, contractors, or a combination of these)?




    Section 10 I -- Investigation and Discipline


    127. Is there a process for investigating and disciplining the accounting profession in your country?

    128. Which of the following best describes the responsibility for the investigatory and disciplinary function in your country?
      Government or other agencies are solely responsible for this function.
      Government or other agencies have this responsibility, but the member body or bodies participate in the process.
      Government formally delegates this function to the member body or bodies, to exercise on its behalf.
      Member body or bodies have separate and independent processes that operate alongside processes of legal authorities.
      Other (please explain)


    129. Please indicate the name of the body or bodies responsible for investigation and discipline.
      Disciplinary Committee of ICAI.


    Responses to the remaining questions in this Section are required if your organization has responsibility for investigation and disciplinary actions.

    130. How many voting members does the body have?
      5


    131. Are the members of the body involved on a voluntary basis or employed by the standard-setting body?
      Voluntary  
      Employed  
      Both - Please describe:


    132. What are the criteria considered in selecting members of the body (e.g., best person for the job, sector of the profession, private and public members, academic, geographical representation, etc.)?
      The members of the Disciplinary Committee are appointed from the members of the ICAI Council. Apart from the President and Vice President of ICAI, a member of the Disciplinary Committee is necessarily amongst the ICAI Council members, who are nominated by the Government of India.


    133. Who appoints these members (e.g., member body, government, user, regulator, etc.)?
      As responded in Question 132.


    134. What is the term of appointment for members?
      1 Year(s)


    135. For how many years has the body been in existence?
      1 Year(s)


    136. Please indicate the budget in US$ of the body for the last fiscal year.
      Note: Please enter a whole number using commas (e.g., 4,000,000)

      288,800

      Please enter the exchange rate used to calculate this number.

      Note: Please enter a decimal amount (e.g., 4.0027)

      45.000 (specify currency)



    137. To what entity is the body accountable?
      Disciplinary Committee is a standing Committee of ICAI. The Disciplinary Committee is accountable to the Council of ICAI.

      The ICAI Council meets as frequently as it can. For instance the Council met nine times, the meetings spanning over 26 days during the financial year 2003-2004. Disciplinary Committee of ICAI met for 34 days during the same period.



    138. Approximately how many days per year does the body meet in full session (including teleconferences)?
      34 Day(s)



     

     

    Disclaimer

    The information contained within the Part 1 Assessment of the Regulatory and Standard-Setting Framework Questionnaires, Part 2 SMO Self-Assessment Questionnaires, and Part 3 SMO Action Plans are based entirely on information provided to IFAC by the IFAC member or associate to which the information relates. Further, the information has been collected by IFAC for the exclusive use and benefit of IFAC and IFAC's members and associates, but is being made available through this website to the general public in the interest of transparency of the IFAC Member Body Compliance Program. While certain efforts are made to validate the information, IFAC undertakes no obligation to confirm or investigate the completeness or accuracy of any of the content of the questionnaire or action plan, now or at any time in the future. Persons accessing the questionnaire or action plan assume full responsibility for the use of the information set forth herein. IFAC does not make any express or implied warranties or representations whatsoever as to any information provided through the questionnaire or action plan, including, without limitation, that the information contained herein will be error-free. IFAC shall not be liable for any damages, including, without limitation, direct, indirect, incidental, special, punitive or consequential damages, that result in any way from your use or reliance on information provided in the questionnaire or action plan. If you need to rely on the information set forth herein for any purpose, you are urged to confirm the information set forth herein with other sources.

    * Indicates organizations that qualify to submit SMO Action Plans biennially

  •