Recent Developments in Accounting Profession CA Surendra Kumar Rakhecha, Surat

Recent Development in Accounting Profession Dedicated to The Great Business Tycoon

DHIRUBHAI AMBANI
28 12 1932 to 06 07 2002

Recent Developments in Accounting Profession : Two Sets of QQ

Recent Developments in Accounting Profession

What was PAST ?
Till 1987 : Are you a CA!

What is present ?
In 2012: Are you Too a CA !

Recent Developments in Accounting Profession

ACCOUNTING PROFESSION IN THE VIEW OF PAST PRESIDENT CA (Dr.) R C COOPER 1963-64

At 15th AGM of the Council on 17th September, 1964

ICAI Journal July,12 p.103

Recent Developments in Accounting Profession CA Surendra Kumar Rakhecha

The problem of INCREASING THE NUMBER OF QUALIFIED CHARTERED ACCOUNTANTS to meet the continuously growing demand without at the same in any way reducing the standard of training is a DIFFICULT one.

The care which the Institute takes in this matter will determine the quality of its members in future, a crucial period, which will call for tremendous intellectual effort and versatility on the part of CHARTERED ACCOUNTANTS in applying their skills to the changing needs of commerce and industry.

Recent Developments in Accounting Profession

1. 2. 3. 4. 5. 6. 7. 8. 9. Accounting Auditing Banking & Finance Taxation Capital Market Corporate & Allied Laws Information Technology Management and

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Recent Developments in Accounting Profession

Road Ahead for the Profession 1. Project Appraisal & Funding 2. Debt Syndication:MBA in Fin. 3. Valuation 4. Due Diligence 5. Merger & Acquisition 6. Risk Assessment :DIRM 7. Restructuring of Business 8. ERP Implementation 9. Internal Audit 10. System Audit

Recent Developments in Accounting Profession

ICAI VISION STATEMENT 2030 To Become Worlds Leading Accounting Body, A Regulator and Developer of Trusted and Independent Professionals with World Class Competencies in Accounting, Assurance, Taxation, Finance and Business Advisory Services.

World View and Vision on Profession: CA Mohandas Pai

Challenges & Opportunities
1. Uncertain & Unpredictable Economic Environment 2. Global Expansion 3. Proactive Risk Management 4. Management of Foreign Currency Risks 5. International Taxation and Compliance 6. Robust Information Systems 7. Harmonization of Accounting Standards 8. India as a preferred destination for Foreign Investors 9. Inclusive Growth

ICAI Journal July 2012 p.61

World View and Vision on Profession

Future of Accountancy Profession in SRI LANKA and Scope for Indian CAs
1. Conversion of Accounting Standards with IFRS w.e.f. 1st January, 2012 2. Commenced Deliberations on LLP 3. Environmental Matters

World View and Vision on Profession

Objectives of the Hong Kong Institute of CPAs and Scope for Indian Accountants

1. Agricultural Bank of China listed in Hong Kong and Sanghai : Raised $22bn 2. Stock Market : 3rd in Asia & 7th in the World :Market Cap. $2.2 trillion. 3. Cross Boarder Deals 4. Till 1980; use of Abacuses instead of Calculators ! 5. Established in 1988, now having world class qualification program of Accountancy
ICAI Journal July 2012 p.73

World View and Vision on Profession

The Future of Accounting A CANADIAN PERSPECTIVE

1. MOU with ICAI in 2011 2. Despite having Quality AS; moved to IFRS 3. Adopted International Standards on Auditing 4. Still 40 Different Accounting Entities for regulating members,students & firms ! 5. Most of Canadian CAs are at Retirement Age 6. Low replacement Birth Rate

Recent Developments in Accounting Profession

Key Points : 1. Corporate RevenueImpact of IFRS Adoption on Taxation Deferred CreditEffective Interest Rate as Flash Back : (ICAI Journal :May, 2007) a Deferred Finance Income Ind AS 18 In China 3 lacs shortfall of qualified accountants were 2. Service Sector only there in 2007 and looking to Percentage of the growth; it may require Completion further 30 lacs over the coming Method : years. Ind AS 18 1. IFRS is fair valuation driven 2. Claim of Depreciation: 2. 2000 Disclosure Finance Lease : Lessor Requirements NIL & Lessee : Allowed :
ACCOUNTING :

ICAI Journal Dec 2012 p.79

Ind AS 17

Recent Developments in Accounting Profession

ACCOUNTING :

Key Points :

Revised Schedule VI
A Scientific Approach towards Preparation of Financial Statements

ICAI Journal June, 2012 p.63 ICAI Journal Sep, 2012 p.52

1. Equity and Liabilities and Assets 2. Vertical Form 3. General instructions inserted both in BS & P&L 4. Accounting Standards have overriding effect over Schedule VI 5. Current and Non Current Asset and Liabilities 6. Definition of Operating Cycle

Recent Developments in Accounting Profession

ACCOUNTING :

Other Key Points : 1. Other features : 2. Rounding off related to turnover 3. Disclosure of continuing default in repayment of loans and interest. 4. Removal of Redundant disclosures like quantitative information.

Distinctive Features of Revised Schedule VI

Key Points : 1. Recognition to Accounting Standards 2. Moving near IFRS 3. Adherence to Permanency in Presentation of Financial Position 4. Negative Figures in Balance Sheet its impact
ICAI Journal Aug 2012 p.105

Recent Developments in Accounting Profession

Triple Bottom Line Accounting Need of the Hour for Sustainability Goal 1. Profit - Financial 2. People - Social 3. Planet - Environmental
In India & Globe : TATA, ITC, GE, Unilever,P& G, J&J, Vodafone, E&Y, Cadbury
ICAI Journal Oct,2012 p.60

Recent Developments in Accounting Profession

Integrated Reporting: Moving Beyond Financial Reporting The International Integrated Reporting Council:12/9/11 Towards Integrated Reporting : Communicating Value in the 21st Century 60 Companies invited : Tata Sons, Microsoft, HSBC, Coca Cola etc. OVERALL THOUGHT PROCESS: 1.Stewardship, 2. Focus, 3. Timeframe, 4. Trust, 5. Adaptive, 6. Concise, 7. Technology enabled
ICAI Journal May,2012 p.71

Expert Advisory Committees Opinion

SALES RETURN :

Past Experience 22% of Total Sales

Accounting Policy : When goods were physically returned till the finalization of the books; were considered for PROVISION.

Sales upto 31 03 2012 : Rs. 50 Crs. Books Finalized : 31 08 2012 : Goods returned till date : Rs. 8 Crs. Total Provision required for Rs. 11 Cr.? Points of consideration : AS 9 : Revenue Recognition
ICAI Journal Mar 2012 p.59

Recent Developments in Accounting Profession

AUDITING : The IAASB* and Enhancing the Value of Auditor Reporting

Key Points :

1. Going Concern 2. Auditor Commentary 3. Disclosure of Name of the *International Auditing and Assurance Engagement Partner Standard Board 4. Statement of Compliance with Ethical Requirements IAASB Explores Way to Improve
Value of Auditors Report for Stakeholders

5. Involvement of Other Auditors 6. Auditors Responsibility Prof. Arnold Schilder 7. Responsibilities of Management and those Chairman of IAASB & ICAI committee charged with Governance 8. Re-sequencing of Elements of Auditors Report
ICAI Journal Aug 2012 p.109 & 110

Recent Developments in Accounting Profession

AUDITING : System Audit of GRC Using COBIT

Key Points :

1. Sarbanes Oxley Act (SOX) 2. Clause 49 of Listing Agreement in India

Review using COBIT 5 : 1. Stakeholders Needs 2. Enterprise Goals 3. IT Related Goals 4. IT Processes

GRC :
Governance Risk ( ERM ) Compliance

ICAI Journal Sep12 p.103

Recent Developments in Accounting Profession

BANKING : Key Points :

BASEL III

Better CAPITAL quality Implementation of BASEL III Capital Conservation Capital Regulation in India Buffer Countercyclical Buffer Minimum Common Equity and Tier I Capital Requirements
ICAI Journal Sep 12 p 99

Recent Developments in Accounting Profession

CAPITAL MARKET RELIABILITY OF IPO GRADES FOR RETAIL SUBSCRIPTION

ICAI Journal Feb 2012 p.111

Key Points : 1. What is IPO Grading 2. What are the Factors which get Evaluated 3. Pitfalls : Issue price not considered for grading, No recommendation, Non-Transparency and Un-accountability of Rating Agencies 4. Empirical Analysis

Recent Developments in Accounting Profession

CAPITAL MARKET AIF* Regulations : Paving the Way for a Variety of Collective Investment Devices

3 categories of AIF on the basis of their investment: Category I : Early stage ventures, SMEs or Infra or sectors relevant for social and economic development Category III : Derivatives, complex or structured products, employ leverage to invest Category II : Not coming

*AIF : Alternative Investment Funds

ICAI Journal Aug 2012 p.123

Application for Settlement of Cases as Amended by Finance Act,2011

Taxation Q1 : Returned Loss : Rs.3 Cr. Loss Assessed by AO : Rs. 2 Cr. Correct Loss : Rs.75 Lacs only Q 2. Filed Return Rs.10 Lacs Assessed Income : Rs.25 Lacs Correct Income : Rs.45 Lacs
Whether application can be made to Settlement Commission u/s 245C

Key Points : 1. Scope widened to RELATED PERSON Relative, Director, Partner, Substantial Interest in the Business 2. Meaning of EXISTING PERSON

3. Meaning of SPECIFIED PERSON

Waiver of Term Loan, Working Capital Loan : Taxability under Income-Tax Act
Taxation
1. Logitronics P Ltd :Delhi HC 333 ITR 386

2. Solid Containers Ltd : Case No. 1,2,3 Working Bombay HC Capital Loan waived trf to P & L A/c : Business Income
3.

T V Sundaram Iyengar & Sons Ltd : 222 ITR 344 SC

Term Loan : No Business Income

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Controversy ?

1.

Kerala Estate Mooriad Chalapuram 166 ITR 155

2.

Alchemic P Ltd 130 ITR 168 Guj HC (approved in Mafatlal Gangabhai & Co. P Ltd 219 ITR 644 SC )

Recent Developments in Accounting Profession

INFORMATION TECHNOLOGY:

4. Legal Evaluation : 1. Subject matter of Technical Knowhow 2. Mode of Technology Transfer 3. Territory of the Agreement 4. Improvement of Technology 5. Trademark and logo of licensor 6. Intellectual Property Rights 7. Payment of Technical Fees 8. Non-disclosure Agreement 9. Governing Laws and Arbitration clause 10. Perpetuity of Ownership Transfer

Roadmap for a Successful Technology Transfer

Key Points :

1. Liberalization in Import of Technology 2. Evaluation of Technology Transfer Proposal 3. Financial Evaluation

ICAI Journal June12 p.121

Recent Developments in Accounting Profession INFORMATION TECHNOLOGY: Scoping Information Technology Enabled Services by Using COBIT 5
Key Points : 1. Meeting stakeholders needs. 2. Governance Domain & Processes 3. Management Domain & Processes 4. Understanding Structure of COBIT 5 enabling Process Knowledge Base 5. How to use COBIT 5 6. Developing Customized Approach for Scoping Assignments

ICAI Journal June12 p.126

Recent Developments in Accounting Profession

INFORMATION TECHNOLOGY: System Audit of GRC Using COBIT

Key Points :

1. Sarbanes Oxley Act (SOX) 2. Clause 49 of Listing Agreement in India Review using COBIT 5 : 1. Stakeholders Needs 2. Enterprise Goals 3. IT Related Goals 4. IT Processes

GRC :
Governance Risk ( ERM ) Compliance

ICAI Journal Sep12 p.103

Recent Developments in Accounting Profession

Corporate & Allied Laws Key Points :

Ombudsman : A Regulator to Regulate the Regulator

Banking Ombudsman Insurance Ombudsman Income Tax Ombudsman Indirect Tax Ombudsman

1. Lokpal & Lokayuktas Bill in 1968 2. Telecom Regulatory Authority of India (TRAI) 3. SEBI 4. Forward Market Commission (FMC) 5. Central & State Electricity Regulatory Commissions

ICAI Journal June12 p. 93

Hindu Undivided Family

Recent Developments in Accounting Profession

Corporate & Allied Laws

Key Points :

Hindu Law and Hindu Succession (Amendment) Act, 2005 What if the father was alive till 09 09 2005 : the date of Enactment of the above said Act
Case of S Seshachalam Vs. S Deepnadayalam dated 05 08 2009 Madras High Court

Death occurred : Father 1965 : Mother 1968

S1 S2 D1 D2 &

1. Selling of HUF property is now difficult 2. Coparcener includes female members 3. What course of action to be taken : a. Will or Gift by father b. Renunciation of Rights at the time/after the marriage of the female member?
ANY OTHER BETTER COURSE OF ACTION ?
ICAI Journal Dec12 p.115

Recent Developments in Accounting Profession

ETHICS Key Points : 1. Glocalisation, not Globalisation 2. Ethical Glocal Governance is less about individual morality and more about balancing 3. Rise of Accounting as a Force behind Corporations 4. When & Why questions of Ethics Arise?

Ethical Governance for a knowledge-based Economy :

Reconnecting Accounting and Auditing with Knowledge

ICAI Journal June12 p. 119

Recent Developments in Accounting Profession

MANAGEMENT Key Points : 1. BSC : A Critique Balanced Scorecard (BSC) 2. Aspects of the BSC in Corporate India : - Customer Perspective - Learning & Growth From Philosophy to Perspective Practice 4. Internal Process Perspective Flash Back : 5. Financial Perspective BS developed in 90s (Objectives,Measures, Targets & Initiatives) Financial & Non-Financial
Performance
ICAI Journal Feb12 p.121

Recent Developments in Accounting Profession CA Surendra Kumar Rakhecha

The picture depicts the likely DANGER (Suicide) of BLIND GROWTH in Business, Profession & Society.

Recent Developments in Accounting Profession CA Surendra Kumar Rakhecha

Recent Developments in Accounting Profession CA Surendra Kumar Rakhecha