My Dear Members,
Wish you a Merry Christmas and may this festival bring abundant joy and happiness in your life!
Change of Leadership
December 2018 will be remembered as month in which we witnessed change in leadership. There will be change of leadership at the ICAI from February 2019 when the term of the current council will end, but the leadership will be decided now. December also witnessed the results of the elections in five cru-cial states that will set the tone for the critical general elections to the Lok Sa-bha in 2019. Nobody can say how much the assembly poll results will impact the next Lok Sabha elections due a few months later in 2019, but the results will certainly shape the strategies of various political parties many of them having major economic implications. We also saw the change of leadership at the Reserve Bank of India (RBI).
The role and duties of Central banks around the world are such that there will always be a tug of war of sorts with the gov-ernment. The autonomy for the central bank is an essential and accepted gov-ernance requirement and the same should be upheld. The change of the RBI governor is now a thing of the past and let us now move forward without speculating further and blaming individuals or Institutions, hoping that what has happened has happened for the good of the country and its people. The most important qualities of any leader are honesty and integrity, commitment and passion, creativity and innovation and ability to inspire others. Hope all the new leaders live upto these qualities and are made accountable for their ac-tions.
National Financial Reporting Authority (NFRA)
The National Financial Reporting Authority (NFRA) Rules 2018 were notified and came into effect from November 14, 2018. Besides, formulation and lay-ing down of accounting and auditing policies and standards, NFRA will moni-tor and enforce the compliance of these standards. NFRA has also been given powers to oversee the quality of service of the professions associated with en-suring compliance with such standards, and suggest measures required for improvement in quality of service and such other related matters. This will ef-fectively clip the wings of The Institute of Chartered Accountants of India’s (ICAI’s) monitoring and disciplinary powers over auditors of entities gov-erned by NFRA. These rules specify certain types and size of companies and body corporates that will be governed by NFRA. Will the notification of NFRA Rules bring an end for the CA Institute’s oversight on auditors of listed entities, large unlisted companies? What will be the role of ICAI now? How will NFRA look at the audit professionals? Will they understand the practical difficulties and ground realities or will they just go mechanically by the rule book checklist approach? How will this pan out only time will tell but it is certainly going to be challenging times for us in the Audit profession.
ICAI Annual Report and Audited Accounts
Recently ICAI announced the 69th Annual Report along with the audited an-nual accounts for the year ended March 31, 2018. Some salient financial per-formance highlights for FY 2017-18 were (a) almost three folds increase in net surplus from Rs.6,316 lacs to Rs.18,859 lacs in the previous year basically aided by increase in the fee income from members and students (b) Member-ship fee almost doubled (c) almost 2.5 times increase in the investments and cash generated from operating activities (d) 20% increase in cash and cash equivalent on the Balance Sheet date and (e) almost 20% increase in the size of the balance sheet. Further, the annual report also discloses that out of the 164 Branches set up by the ICAI, 107 branches are having their own premises and only 57 Branches do not own premises. All these financial parameters along with other disclosures on the state of the art infrastructure built over the years talks laurels about the achievements of ICAI, however there are certain other notable observations in the said report. Additions as associate members dur-ing FY 2017-18 reduced to 8,519 as compared to 10,258 in the previous year, the total number of students registered for the CA course is showing a contin-uous annual declining trend from 2012-13 onwards having reduced from more than 3,11,000 in 2012-13 to 2,10,000 in 2017-18. The average additions to members of ICAI is also constant between 10,000 to 12,000 annually (barring 2016-17 where additions were almost 20,000). There is no doubt that our In-stitute has made remarkable all-round progress on all the major parameters however there are concerns over the sustainability of its monopolistic and dominant position. The flattening growth rate of members and the major down trend in the younger students being attracted of our profession are wor-rying trends and all of us need to introspect on this.
ICAI Elections 2018
By the time this communique reaches you the results of the triennial election to 24th Council and the 23rd Regional Councils of ICAI will be out and I on behalf of the Bombay Chartered Accountants’ Society would like to congratu-late all the newly elected central and regional council members. The Council at ICAI will comprise of 32 elected members from the five regions of the country and in addition to this will have 8 members nominated by the Central Gov-ernment. The elected council members will be the torch bearers of our profes-sion representing around 2,85,000 members and more than 7,25,000 students. We wish all the very best to the newly elected council / regional members and hope that they have a clear vision for the profession and have the courage to withstand all the pressures to navigate through rough waters. Our profession currently is passing through hard times and the journey in the recent past has not been smooth. We wish that our representatives at the councils lead by ex-ample and guide its members to attain professional heights and rebuild their morale. It gives me great pleasure to inform that many of these newly elected council members are members of our society and we at BCAS will be looking forward to working closely with them to further the common interest of the profession and its members. We pledge our unconditional support to the in-coming President of the ICAI.
New Year Resolutions
The year 2018 is coming to a close and in the next few days 2018 would be-come history. For some it would have been a year of happiness, growth and achievements. For some it would not have been such a rewarding and pleasant year. It’s that time of the year, for all of us to look back to learn from the past and erase the unpleasant memories and lost opportunities and plan for the fu-ture. It’s time to make New Year’s Resolutions. All of us will be making reso-lutions such as, improve health and fitness, developing better eating habits, quit certain bad habits, spend more time with family and friends, follow a passion / hobby outside professional life, learn something new or develop new skill sets, volunteer for social service, learn to say no, work towards enhanc-ing professional competency, etc. According to some survey on the internet, only 12% of people who aspire to achieve ambitious goals experience the taste of victory. Some of the tips to prevent New Year’s resolutions from fail-ing is to make incremental changes in a slow and steady manner rather than “I want it all and I want it now” attitude, believe in yourself and have confidence in your achievement and never doubt your capabilities, don’t think too much because actions speak larger than words, track your progress, take support from others, focus on your goal and get back on track if you feel you are los-ing your way.
May all your dreams and wishes come true, may God bless you with all the health and prosperity. Wishing you and your family a very Happy New Year ahead and May each day of 2019 bring you luck, happiness, joy and prosperi-ty.
Wishing all of you
With best regards,
CA. Manish Sampat