Latest Expert Exchange Queries
sitemapHome | Registration | Job Portal for CA's | Expert Exchange | Currency Converter | Post Matrimonial Ads | Post Property Ads
 
 
News shortcuts: From the Courts | News Headlines | VAT (Value Added Tax) | Service Tax | Sales Tax | Placements & Empanelment | Various Acts & Rules | Latest Circulars | New Forms | Forex | Auditing | Direct Tax | Customs and Excise | ICAI | Corporate Law | Markets | Students | General | Indirect Tax | Mergers and Acquisitions | Continuing Prof. Edu. | Budget Extravaganza | Transfer Pricing
 
 
 
 
Popular Search: TDS :: due date for vat payment :: VAT Audit :: form 3cd :: VAT RATES :: ICAI offer Get Windows 7,Office 2010 in Rs.799 Taxes :: cpt :: empanelment :: ACCOUNTING STANDARDS :: articles on VAT and GST in India :: list of goods taxed at 4% :: ARTICLES ON INPUT TAX CREDIT IN VAT :: TAX RATES - GOODS TAXABLE @ 4% :: ACCOUNTING STANDARD :: Central Excise rule to resale the machines to a new company
 
 
News Headlines »
 Is government tapping your phone?
 Income tax department to use analytics to look for discrepancies in bank accounts
 GST Council fails to break deadlock over indirect tax regime, next meet on Dec 11 and 12 to hammer out differences
 Invoking Writ Jurisdiction For Income Tax Matters
 How to file income-tax returns online
 How Income Tax Returns Are Scrutinised
 All About New Income Disclosure Scheme to make Demonetisation successful
 Your deposit may draw income tax notice
 Accepting payment under IDS 2016
 New disclosure scheme could see 50% tax and 4-year limit on cash use for unaccounted deposits
 Pay 50% tax on unaccounted deposits, or 85% if caught, says Modi government

CA rules under government lens
March, 02nd 2009

The ministry of company affairs has begun a comprehensive review of the legal provisions and regulations governing chartered accountants following the Satyam accounting fraud that covers, among other issues, the operation of surrogate firms in India by large foreign audit firms.

Sources close to the development said a notification to this effect will be released soon. The Chartered Accountant Act, 1949, and the Chartered Accountant Regulations, 1988, form the basis for the profession in India.

On the issue of surrogate audit firms established by Indian chartered accountants that tie up with foreign firms, sources said there were numerous anomalies.

One of them is that the Indian firm bags an audit contract but the partner actually auditing the Indian company often belongs to the foreign firm, violating the Companies Act, 1956, and the Contract Act, 1872.

He added that Indian arms of foreign firms have taken advantage of their tie-ups to make it a rule that audits must be conducted by their foreign partners for Indian companies approaching the overseas markets to raise funds or for mergers and acquisitions. No such rule exists, the source said, although the practice is common.

We are, therefore, screening the partnership agreements of all these firms to analyse the legal basis on which the foreign firms audit Indian companies, the source added.

Much of this will change, however, once the Limited Liability Partnership (LLP) Act, 2008, which enables foreign chartered accounting firms to set up audit practices in India, is notified. The Bill was passed by Parliament on December 12, 2008, but is yet to be notified.

Second, the rule of capping the number of audits per partner per firm may also be scrapped or the limit raised, to allow more freedom and competition. The rules currently allow 30 audits per partner per firm, but thinking in the government is that this rule tends to play down merit, since it means audit firms get business irrespective of their track record.

Also under review is the practice of rotating chartered accountants by companies in the interests of introducing more accountability and transparency in the profession. Currently an option, regulators think it makes companies stick to the same auditor for years, which may promote more accounting frauds.

The review is a joint exercise by the ministry and the industry and is based on feedback from various chartered accountant forums.

Among other issues under review are strengthening the monitoring of elections of the Institute of Chartered Accountants of India (ICAI), closer scrutiny of the books of the chartered accountant benevolent fund to ascertain its proper usage, and paid leave by companies and firms to allow chartered accountants to attend seminars and talks organised by ICAI. Such seminars are said to be important part of the learning process, so there is no reason for these not to be held on weekdays to ensure maximum participation.

 
 
Home | About Us | Terms and Conditions | Contact Us
Copyright 2016 CAinINDIA All Right Reserved.
Designed and Developed by Binarysoft Technologies Pvt. Ltd.
Binarysoft Technologies - We Bring IT. Offshore software outsourcing company. We use Global Delivery Model (GDM) and believe in Follow The Sun principle

Transfer Pricing | International Taxation | Business Consulting | Corporate Compliance and Consulting | Assurance and Risk Advisory | Indirect Taxes | Direct Taxes | Transaction Advisory | Regular Compliance and Reporting | Tax Assessments | International Taxation Advisory | Capital Structuring | Withholding tax advisory | Expatriate Tax Reporting | Litigation | Badges | Club Badges | Seals | Military Insignias | Emblems | Family Crest | Software Development India | Software Development Company | SEO Company | Web Application Development | MLM Software | MLM Solutions