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June 2008

ICAI And Its Members

By P. N. Shah, H. N. Motiwalla, Chartered Accountants
Reading Time 7 mins
ICAI & Its Members

1. Disciplinary cases :

In the case of Shri A. R. Chitlangi v. Shri P. L. Tapdiya, the Articled Clerk (A.R. Chitlangi) had filed a complaint against the member Shri P. L. Tapdiya alleging that the member did not pay stipend to him during the period of his articles. The defence of the member was that the articled clerk used to remain absent from his duties frequently without informing the office, he was undisciplined and had irregular behaviour. The matter was referred to the disciplinary committee. In the meantime, the member paid the stipend due to the articled clerk and also issued Form 20, certifying the period during which the articled clerk served his articles with him. In this Form there was no mention about the irregularity or indiscipline of the articled clerk. The only remark which the member had made was that the performance of articled clerk was not satisfactory.

The Disciplinary Committee held the member guilty on the ground that the member did not pay the stipend to the articled clerk and this contravened Regulation 32 B of C.A. Regulations, 1964. The Council accepted this finding and recommended to the High Court to award punishment of reprimand to the member.

The Bombay High Court has not accepted the defence of the member and held that in the facts of this case, the member was guilty of contravention of Regulation 32 B for non-payment of stipend to the articled clerk. The High Court has accepted the recommendation of the Council and reprimanded the member.

(For details please refer P. 1890 of C.A. Journal for May, 2008).

2. Working hours of Articled Assistants :

Some doubts were raised about the working hours of Articled Assistants. The Council believes that article training is an important part of the C.A. curriculum and the same needs to be carried out in accordance with the scheme framed by ICAI. Therefore, the following clarifications are issued by ICAI :

(i) The working hours for the articled assistants shall be 35 hours in a week excluding the lunch break.

(ii) The office hours of the Principal for providing article training to the articled assistants shall not be generally before 9.00 a.m. or after 7.00 p.m.

(iii) The normal working hours for the articled assistants shall not start after 11.00 a.m. or end before 5.00 p.m.

(iv) The working hours for the articled assistants should not exceed 35 hours in a week excluding the lunch break and normally an articled assistant should be required to work during the normal working hours fixed for articled assistants.

(v) In case of the exigencies of work with the Principal, an articled assistant may be required to work beyond his/her normal working hours. However, under such circumstances, the aggregate number of working hours shall not exceed 45 hours per week. The requirement to work beyond 35 hours in a week should not be a practice, but be applicable only in exceptional circumstances. Further, where the articled assistant is required to work beyond normal working hours, and aggregate of such hours exceeds 35 hours per week, he/she shall be entitled to compensatory leave calculated with reference to number of completed working hours, over and above, 35 hours per week.

(vi) The facility of allowing flexible office hours stands withdrawn.

(vii) To ensure that the working hours do not clash with the graduation or any other course, if any pursued by the article assistant, each articled assistant registered on or after 1st April 2008 shall now be required to obtain specific permission from the ICAI for pursuing graduation or other course as permitted under the Chartered Accountants Regulation by submitting Form No.112, within one month from the date of joining the college or course to the ICAI.

(viii) The articled assistant presently registered and undergoing graduation or any other course and who has not obtained specific permission shall be required to obtain the specific permission from the ICAI by submitting Form No. 112 within six months of issue of these guidelines i.e., by 30th September 2008.

(ix) The Certificate in Form No.112 indicating college timings, etc. shall be countersigned by the concerned Principal of the college with the seal and stamp of the College and also indicating the telephone number/s and full address of the College.

(x) In case a student does not comply with the above requirements or violates any of the above guidelines, his/her articleship period shall not be recognised.

(For details refer to p. 1940 – 1941 of C.A. Journal for May, 2008)

3. Accounting technicians :

ICAI on 3rd April, 2008, announced to launch a course for Accounting Technicians from 22nd April for undergraduate students. This is a new course which ICAI wants to introduce in our country. Brief details about the need for Accounting Technicians in our country are stated in the President’s Message at Page 1806 of C.A. Journal for May, 2008 as under :

“The multi-faceted growth of Indian economy has resulted in huge demand for second-tier accounting personnel for large as well as small and medium enterprises. For long, a need was being felt for persons with accounting and related skills commensurate with the requirements at the operational level. Responding to this ever-increasing demand in industry as well as in the services sector, the Council has decided to launch ‘Accounting Technicians Course’. These accounting technicians will not only fill gaps at the operational level as accountants but will also ensure that the value chain in the accounting process does not suffer. With closer integration of agriculture and informal sectors with the mainstream economy, the demand for such professionals is expected to go up every year. I believe that this step will provide a much needed service and further boost our image as a premier accounting Institute in the country. As per the proposal, a step-up approach is being adopted whereby a student having qualified the Accounting Technicians Course will be eligible to enrol for the CA Course. At the same time, a student who has enrolled for a CA course but who for one reason or the other is not able to complete the CA Course will have the option to become an accounting technician. Further, all those students who have passed Intermediate or FE-II Examination of the Institute at any time in the past and have completed articled training shall also be eligible for Accounting Technician Certificate.”

4. ICAI News:(Note: Page Nos. given below are from CA. Journal for May, 2008)

i) Auditing  Standard:

Exposure draft on Revised Standard on Auditing (SA) 260 on ‘Communication with those charged with Governance’ is published for comments by members by 15-6-2008. Similarly, Explanatory Memorandum to this Exposure draft is also published (Pages 1959-1975).

ii) Clause 49 of Listing  Agreement:

SEBI has issued a Circular on 8-4-2008 making some modifications in clause 49 of the Listing Agreements. This Circular clarifies that 50% of the Directors on the Board of Directors of a listed company should be independent directors if the non-executive chairman of the Board is a promotor or related to the promotors or persons occupying management positions. At present, if the chairman is a non executive director, the requirement is that only 1/3rd of the Board should consist of independent directors. SEBI has also stated that the minimum age of an independent director should be 21 years (Page 1952).

iii) Perspective  Planning  Committee:

ICAI has appointed the above committee which will identify the areas of concern by flagging issues which affect the profession. The committee hag invited the views of the members. (Page 1948).

iv) New Branches  of ICAI :

Following new Branches have been established w.e.f 27-3-2008 :

a) Amravati  Branch  of WIRCb) Pimpri Chinchwad Brach of WIRC (Refer page 1946)

v) Delivery  of Journal at Residential  Address:

Presently the monthly journal of the Institute is delivered only at the professional address registered with the Institute. However, with a view to ensuring timely delivery of the journal to members and to enable them to read it at their convenience, ICAI has decided to give an option to the members to get their copy of journal at the residential address, if they so desire. All those members who are desirous of getting the journal at the residential address may send  a request  in writing  (page  1807).

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