Monday, February 11, 2013

ICAI Standards, Guidance Notes, EXpert Committees' Opinions, ...

SG News

Our beloved Institute of Chartered Accountants of India(ICAI) is the world’s 2nd biggest accounting body and the one with constitutional powers of framing & governing accounting practices in India. Ministry of Corporate Affairs with its new proposal of NFRA has plans to take away the two big...
Posted: 13 Feb 2013 04:53 PM PST
Whether the company is maintaining proper records showing full particulars, including quantitative details and situation of fixed assets. The clause requires the auditor to comment whether the company is maintaining proper records showing full particulars, including quantitative details and...
Posted: 13 Feb 2013 05:13 PM PST
The 2013-14 Budget will be presented when the Indian economy is going through one of its most difficult phase. The 2012-13 Budget had forecast a growth rate of 7.6% and an inflation rate of 6.5%. In the first half of 2012-13, the economy grew by around 5.3% & likely to be almost same in the...

ICAI < It is Time for 'INTROSPECTION' (in its profound sense)

Mail sent by a novice , copied below :


>The February 2013 Issue of ICAI journal, in quick succession of the past months, is seen to carry quite a few articles on a contextually important but worrisome area of Bank Audits.
Specially marked and noted are the following:
1. "Treasury Audit Approach - Change with the Tide !" (pg. 1258)
2. "Overview of Bank Branch Audit" (pg. 1254)
In the latter mentioned article, the initial paragraph- head note, "Treasury operations of a Bank", to one's understanding, focuses on the intricate difficulties bound to be faced with, with no scope for escape or wishing -away, by the Banks so also by the statutory auditors in today's highly computerised and overwhelming risk environments.
With the same breath, if one turns to the serial write-up  on the other equally crucial topic of, - "Know your Ethics" (pg. 1230), it has been underscored, cautioning members in practise against professional misconduct proceedings in the event of being found to have failed "to disclose a material fact known to him which is not disclosed......misleading" .
<> According to personal view, what needs to be appreciated is that, from pragmatic considerations, CAs, especially those not having adequate experience and exposure, or othertwise suitably and failrly equipped as expected, are bound to be confronted with a few  basic problems, nay predicaments, of a difficult and onerous kind:
1. What are the attendant parameters to be essentially kept in mind, for designing the audit programme, best suited in a given case, so as not to oversight any one or more 'facts', regarded or likely to be regarded as a 'material fact' ?
2. How/where to begin, and how to go about and ascertain, for deciding,  - of course, "to the best of his knowledge and belief", more so, -of his ability / 'capacity', -which of the facts that come to be 'known' are 'material' so as to require 'disclosure' as contemplated?
3. What precisely should be the methodology he is reasonably expected to adopt/follow, to firstly even 'get to know' of all such facts?
In short, of common and grave concern is, - as to whether the rules of guidance, etc.,- even granting all of them are  available in the form of Standards, Guidance Notes, Expert Committees' opinions , so on, and are sufficiently adequate, -more importantly in simple language so as to be user-friendly, -and amenable to being understood and followed by CAs, especially those belonging to the category referred to in the opening paragraph above. 
In the context herein, one may wish to bring to focus the dubious, rather inherent hollowness, in certain expressions conventionally, rather as a matter of routine, being used,- e.g. in the prescribed form of tax audit report, - "in our opinion", "to the best of my knowledge were necessary", so on.
(For an elaboration, ref. viewpoints aired in the published handy book - A HANDBOOK ON TAX PRACTICE) >

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