The Institute of Chartered Accountants of India (ICAI) set-up by an Act of Parliament viz. The Chartered Accountant Act, 1949 to regulate the profession of Chartered Accountancy is the second largest and prominent accounting body in the world. It has been taking various proactive measures from time to time, aligned with the changing facets of the Indian economy, for continuously raising the standard of quality of accounting and financial reporting.
The Institute, being a statutory body, is administered by a Council which is the highest policy making body of the Chartered Accountancy profession. The Council is comprised of 40 members of whom 32 are elected from among its members spread all over the country. The remaining eight members are nominated by the Central Government representing such authorities as the Comptroller and Auditor General of India, Ministry of Finance, Ministry of Corporate Affairs and persons of eminence from the fields of law, banking, economics, business, finance, industry, management, public affairs, etc.
Considering the developments relating to Satyam Computers Services Ltd. (Satyam), the Council of the Institute, at its meeting held on 12th and 13th January, 2009, constituted a High Powered Committee to look into the matters arising out of Satyam fiasco. The Committee, at present, is composed of the following members:
CA. Uttam Prakash Agarwal, President (Chairman) CA. Ved Jain, Vice-Chairman (Immediate Past President) CA. Shanti Lal Daga (Council Member) CA. Subodh Kumar Agrawal (Council Member) CA. Akshay Kumar Gupta (Council Member) Shri K.R. Maheshwari (Government nominee) Shri O.P. Vaish (Government nominee)
The terms of reference of the above Committee include to look into the entire gamut of financial reporting, accounting and auditing aspects with regard to Satyam fiasco, including helping/coordination with the investigation being carried out by various agencies, going into the roots of the problem, effectiveness of the system in place, systemic issues; to identify the root causes including persons involved/associated; and to suggest change(s), wherever required, for the purpose of making appropriate recommendation(s) to the Central Government, SEBI and other Regulators.
The said High Powered Committee, in the course of its task, has decided to write to certain Indian Chartered Accountants firms having affiliation with international entities asking them to submit following papers/documents. Agreement/contract with the multinational entity
Terms and conditions for usage of name of the afore-mentioned multinational entity
Arrangement for sharing of fees/profit with other Indian CA firm(s) with similar/identical name and with the afore-mentioned multinational entity
Arrangement for sharing of human resources and infrastructure with other Indian CA firm(s) with similar/identical name and with the afore-mentioned multinational entity
Details of remittances made to and received from the afore-mentioned multinational entity
Copy of Partnership deed of the CA firms registered with ICAI with similar/identical name, as in vogue in the last five years.
Income-tax assessment orders for the last 3 years in respect of the CA firms registered with ICAI with similar/identical name. If assessment orders have not been received, then to submit computation of income and copies of returns.
Copies of letterheads and visiting cards generally used.
The Institute has issued notices to 12 such Indian CA firms by 13th April, 2009.