Institute of Chartered Accountants of India (ICAI)

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The Supreme Court recently upheld a rule issued by the Institute of Chartered Accountants of India (ICAA) barring chartered accountants from accepting more than the "specified number of tax audit assignments" in a financial year.

About Institute of Chartered Accountants of India (ICAI):

  • It is a statutory body established by an Act of Parliament, viz., the Chartered Accountants Act, 1949, for regulating the profession of Chartered Accountancy in the country. 
  • It functions under the administrative control of the Ministry of Corporate Affairs, Government of India.
  • Headquarters: New Delhi
  • It is the second largest professional body of chartered accountants in the world.
  • The affairs of the ICAI are managed by a Council in accordance with the provisions of the Chartered Accountants Act, 1949, and the Chartered Accountants Regulations, 1988. 
    • The Council consists of 40 members, of whom 32 are elected by the Chartered Accountants and the remaining 8 are nominated by the Central Government, generally representing the Comptroller and Auditor General of India, the Securities and Exchange Board of India, the Ministry of Corporate Affairs, the Ministry of Finance, and other stakeholders.
  • Functions of ICAI:
    • Regulates the profession of Accountancy.
    • Examination and education of Chartered Accountancy course.
    • Continuing professional education of members.
    • Conducting post-qualification courses.
    • Formulation of accounting standards.
    • Prescription of standard auditing procedures.
    • Laying down ethical standards.
    • Monitoring quality through peer review.
    • Ensuring standards of performance of members.
    • Exercise disciplinary jurisdiction.
    • Financial reporting review.
    • Input on policy matters to the government.

Q1: What is auditing?

By definition, auditing is an official inspection and verification of the credibility of financial reports. Audits can be conducted by either a business’s management as an internal control process or by the government, in case they notice suspicious financial activity.

Source: Supreme Court Upholds ICAI Rule Limiting Number Of Tax Audits By Chartered Accountants Per Yer; Declares It Operative From April 1, 2024