CA Day:- 1st July, 1949 - www.icai.org

CA Day:- 1st July, 1949 - www.icai.org

The Institute of Chartered Accountants of India is a 2^nd largest professional accounting body in the world. The ICAI had been formulated as on 1^st July, 1949 as a body corporate under the Chartered Accountants Act, 1949 enacted by the Parliament of India. The ICAI prescribe the prescribes the qualifications for a Chartered Accountant, conducts the requisite examinations and grants license in the form of Certificate of Practice. The objective of the establishment of the ICAI is to regulate the auditing and financial accounting profession in India. The headquarters of the institute is situated at New Delhi and it has 118 Indian Branches and 12 overseas chapters.

ICAI actively engages itself in aiding and advising economic policy formulation. For example ICAI has submitted its suggestions on the proposed Direct Taxes Code Bill, 2010. It also has submitted its suggestions on the Companies Bill, 2009.

The ICAI is the only licensing cum regulating body of financial audit and accountancy profession in India. It provides recommendations of the accounting standers which are to be followed by the companies and other body corporate in India.

The members of the ICAI are known as Chartered Accountants. Chartered Accountants are subject to a published Code of Ethics and professional standards, the violation of which is subject to disciplinary action.

History

The Companies Act, 1913 passed in pre-independent India prescribed various books which had to be maintained by a Company registered under that Act. It also required the appointment of a formal Auditor with prescribed qualifications to audit such records. In order to act as an auditor a person had to acquire a restricted certificate from the local government upon such conditions as may be prescribed. The holder of a restricted certificate was allowed to practice only within the province of issue and in the language specified in the restricted certificate. In 1918 a course called Government Diploma in Accountancy was launched in Bombay (now known as Mumbai). On passing this diploma and completion of three years of articled training under an approved accountant, a person was held eligible for grant of an unrestricted certificate. This certificate entitled the holder to practice as an auditor throughout India. Later on the issue of restricted certificates was discontinued in the year 1920.

In the year 1930 it was decided that the Government of India should maintain a register called the Register of Accountants. Any person whose name was entered in such register was called a Registered Accountant. Later on a board called the Indian Accountancy Board was established to advise the Governor General of India on accountancy and the qualifications for auditors. However it was felt that the accountancy profession was largely unregulated, and this caused lots of confusion as regards the qualifications of auditors. Hence in the year 1948, just after independence in 1947, an expert committee was created to look into the matter. This expert committee recommended that a separate autonomous association of accountants should be formed to regulate the profession. The Government of India accepted the recommendation and passed the Chartered Accountants Act in 1949 even before India became a republic. Under section 3 of the said Act, ICAI is established as a body corporate with perpetual succession and a common seal.

Role of Chartered Accountants

Chartered Accountants enjoy a statutory monopoly in audit of financial statements under the Companies Act, 1956, Income Tax Act, 1961 and various other statutes in India. Financial statements audited by a chartered accountant are presumed to have been prepared according to GAAP in India (otherwise the audit report should be qualified). However, not all Chartered Accountants work in audit. Firms of accountants provide varied business services, and many accountants are employed in commerce and industry. Their areas of expertise include financial reporting, auditing and assurance, arbitration, risk management, economics, corporate finance, management accounting, information systems audit, corporate law, direct tax, indirect tax and valuation of businesses. The Government of India is now planning to open up a new field of practice in social audit of government welfare schemes like MGNREGA and JnNURM. Apart from the field of professional practice, some CAs work in industry and commerce in financial and general management positions such as CFO and CEO.

Code of Ethics

The Institute has a detailed code of ethics and actions in contravention of such code results in disciplinary action against the erring members. The Institute publishes a Members Hand book containing the Chartered Accountants Act 1949, Chartered Accountants Regulation 1988, Professional Opportunities for Members – an Appraisal, Code of Ethics and Manual for members. These together form the basis of regulation of the profession. The Council also has a Peer Review Board that ensures that in carrying out their professional attestation services assignments, the members of the Institute (a) comply with the Technical Standards laid down by the Institute and (b) have in place proper systems (including documentation systems) for maintaining the quality of the attestation services work they perform.