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Context

• The Supreme Court upheld an Institute of Chartered Accountants of India rule limiting Chartered Accountants to 60 tax audit assignments per year, emphasizing its importance for maintaining audit quality and integrity.

ICAI: India's Premier Accounting Body

Establishment:

• Established on July 1, 1949, the Institute of Chartered Accountants of India (ICAI) stands as the apex body for accounting professionals in India.
• Founded through the Chartered Accountants Act, 1949, by the Parliament of India, ICAI was established with a core mission to promote, develop, and regulate the profession of Chartered Accountancy within the country.

Regulatory Authority:

• ICAI operates under the administrative control of the Ministry of Corporate Affairs, Government of India.

Mission:

• As the statutory body entrusted with overseeing the profession of Chartered Accountancy, ICAI is tasked with several critical objectives.
• These include:
• Fostering excellence in accounting education
• Conducting rigorous examinations for aspiring Chartered Accountants
• Maintaining professional standards and ethics
• Providing guidance and support to its members
• Advancing the accounting profession's integrity
• Enhancing transparency and relevance in the business landscape of India

Role of National Financial Reporting Authority (NFRA)

Standard Setting:

• It recommends accounting and auditing standards to the Government of India, ensuring that these standards align with international best practices and reflect the evolving needs of the Indian economy.
• By setting clear and robust standards, NFRA aims to enhance the quality and reliability of financial reporting across various sectors.

Standards on Auditing:

• Within its mandate, NFRA establishes the Standards on Auditing (SAs) that govern the audit of financial statements in India. These standards provide comprehensive guidelines and methodologies for conducting audits, emphasizing principles such as independence, objectivity, and professional skepticism.
• By adhering to these standards, auditors can uphold the integrity and accuracy of financial reporting, thereby enhancing investor confidence and market stability.

Oversight:

• In addition to standard setting, NFRA exercises oversight over various entities involved in financial reporting, including auditors, accounting firms, and listed companies.
• By promoting accountability and transparency in financial reporting practices, NFRA contributes to the overall integrity and efficiency of India's financial markets.

Membership and Professional Standards:

• Members of the Institute are recognized as ICAI Chartered Accountants or ICAI Accountants, classified as either Fellow or Associate.
• ICAI Chartered Accountants adhere to a published Code of Ethics and professional standards, violations of which can result in disciplinary action.
• Only an ICAI member can be appointed as the statutory auditor of a company under the Companies Act, 2013.

Motto and Emblem

• The motto of the Institute of Chartered Accountants of India (ICAI) is "Ya Aeshu Suptaeshu Jagruti" in Sanskrit, which translates to "a person who is awake in those that sleep."
• This phrase, derived from the Upanishads (specifically the Kathopanishad), was bestowed upon ICAI by Sri Aurobindo at the time of its formation in 1949.
• The emblem, featuring a Garuda (mythical eagle) at its center, symbolizes vigilance and enlightenment.
• In addition to the emblem, ICAI introduced a separate logo for its members in 2007 as part of a brand-building initiative.

Global Affiliations and Memberships

• IFAC, SAFA, and CAPA: ICAI holds the distinction of being a founding member of several prestigious international accounting federations, including the International Federation of Accountants (IFAC), South Asian Federation of Accountants (SAFA), and Confederation of Asian and Pacific Accountants (CAPA). Through these affiliations, ICAI actively contributes to the development and promotion of global accounting standards and practices.
• International Innovation Network (IIN): Additionally, ICAI is a member of the International Innovation Network, fostering collaboration and knowledge exchange in the field of accounting innovation and technology.
• Chartered Accountants Worldwide and IVSC: As an Associate member of Chartered Accountants Worldwide, ICAI participates in a global network of leading accounting institutes, promoting excellence and integrity in the profession. Moreover, as a member of the International Valuation Standards Council (IVSC), ICAI contributes to the development of internationally recognized valuation standards, ensuring consistency and reliability in valuation practices worldwide.

Council of the Institute

• The affairs of the Institute are managed by a council constituted under the Chartered Accountants Act, 1949.
• Comprising 32 elected fellow members and up to 8 members nominated by the Government of India, the council is re-elected every three years.
• The council elects a president and vice-president, who serve one-year terms, with the president serving as the chief executive authority of the council.

Significance:

• ICAI plays a pivotal role in regulating the accountancy profession within the country.

PRACTICE QUESTION Q. Discuss the importance of climate-resilient agriculture in the context of increasing frequency and intensity of extreme weather events. What strategies and practices can be implemented to enhance agricultural sustainability and food security in drought-prone regions?

SOURCE: LIVELAW