21 August 2010

IFRS, direct tax code set to make next fiscal challenging for CAs -Mr G. Ramaswamy, Vice-President, ICAI

Accounting professionals geared up for implementation of IFRS.


The financial year 2011-12 is going to be more vibrant, especially for the accounting professionals, with the implementation of Direct Taxes Code (DTC) and the convergence of Indian accounting standards with IFRS (International Financial Reporting Standards), according to Mr G. Ramaswamy, Vice-President of the Institute of Chartered Accountants of India (ICAI).

Speaking to presspersons on the sidelines of the inauguration of the national conference on 'Direct taxes and allied laws', organised by the Direct Taxes Committee of ICAI here on Friday, he said the next financial year will be a great year for the country.

The professionals will be geared up for the implementation part, and the corporates on the compliance part. This will lead to increase in the revenue collection also, he said. Stating that a lot of developments are taking place with regard to the implementation of IFRS, Mr Ramaswamy said that the ICAI is gearing up its members and industry towards the achievement of the committed date of April 1, 2011. The IFRS will be implemented in a phased manner from 2011-14.

"We are conducting national workshops and meetings throughout the country creating awareness, involving professionals and those who are interested in it. Special e-learning courses and certificate courses are available for chartered accountants," he said.

The ICAI also has mutual recognition arrangements with accounting bodies in England and Wales and Australia. "We are also in dialogue with Canada, Singapore, Malaysia and New Zealand institutes. We are coordinating with them," he said. On the Direct Taxes Code (DTC), he said that for the first time, a proposed legislation was open for debate throughout the country. Tax payers, academicians and chartered accountants have given their views. Stating that the final version will be tabled in Parliament, he said the deadline for DTC implementation is April 2011.

He said the Central Council of ICAI has proposed an amendment on the type of action to be taken in the case a firm is involved in cases of violation. "The Central Council has debated on that. We are proposing an amendment. So we are giving suggestions to the Government," he said.


On the networking of CAs, he said today, 70 per cent of chartered accountants are small and medium practitioners. If the Chartered Accountants (Amendment) Bill 2010 is passed in Parliament, more number of CAs can come together and form an LLP (limited liability partnership) firm. Apart from CAs, these firms can include cost accountants, advocates, valuers, actuaries, and may be MBAs (finance).


An LLP firm can give a host of service, he said, adding that LLPs will be one of the important mediums for the CA firms.

Mr Ramaswamy said that ICAI is already interacting with the Comptroller & Auditor General for end use audit.

Giving the example of National Rural Employment Scheme (NREGS), he said it is being implemented throughout the country through State Governments. So, there should be checks and balances.

"We have already made representation to the Comptroller & Auditor General that NREGS should be audited by the CAs. That will help small and medium practitioners also. It can be monitored throughout the country by CAs. With this, end user can be identified properly," he said.

Stating that the Comptroller & Auditor General is very positive on this, he said, "They have collected information about the CAs available throughout the country. We have given district-wise data. We are pursuing them to make it mandatory."

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