The following decisions taken by the Council of the Institute are brought into force immediately for compliance by the Students / Members concerned. It is advised that required compliance be made by the concerned students / members. It may please be noted that non-compliance will be viewed seriously and proceeded against accordingly.
a) The coaching classes shall not continue after 9.30 a. m. or start before 5.30 p.m. so as to enable the articled/audit assistants to concentrate wholly on practical training.
b) Members of the Institute who are engaged in coaching be advised not to undertake coaching between 9.30 a.m. to 5.30 p.m.
c) An articled assistant should undergo practical training in accordance with the guidelines of the Institute between 10:30 a.m. and 5:30 p.m. During the period an articled assistant shall not be permitted to attend colleges/other institutions for graduation or any other course.
d) Every articled/audit assistant shall submit once in a year a specific declaration duly counter-signed by the Principal to the effect that the he is regularly attending training and his college hours do not clash with his articles timings and that no coaching is undertaken by him between 9.30 am and 5.30 pm on any working day. In the event of breach of this guidelines and not taking permission as required, the articles already undergone shall be de-recognised for such period as the Institute may decide.
e) Every articled/audit assistant shall be required to maintain mandatorily the Work Diary in the Form to be prescribed by the Board of Studies.
f) The Institute to call for at random training report alongwith attendance record and stipend details and also Work Diary maintained by articled/audit assistant from any member/firm in respect of any articled assistant at any point of time during the period of practical training for verification.
g) In case an articled assistant is found not undergoing articles in the manner prescribed he shall be debarred from appearing in the exam upto 3 consecutive exams besides cancellation of such period of articles. The concerned member who allowed such an articled assistant be subject to punitive action besides withdrawing either partly or fully his eligibility to train articled assistant. In Peer Review the Reviewer be required to verify whether training is imparted to the articled assistant in the manner prescribed.
h) No request for termination of articles is entertained from any articled assistant in general and more particularly during the first six months and also during the last twelve months of articles except as provided in the Regulations. In the event of termination, his articles shall not be registered in the same city.
i) No request of an articled assistant for termination (transfer) of articleship shall be considered unless his/her working parent(s) is/are transferred from the city/place where the articled assistant is receiving training to another city and a copy of transfer order / proof is submitted to the principal in proof thereof. On such termination the articled assistant concerned shall join articles training in and around the place of posting of his/her parent(s) and shall not re-register articles in the same city or within 50 Kms radius of the city where he/she has undergone articles prior to such termination.
j) If the articled assistant is not able to serve the articleship for specified genuine medical reasons thereby opting to discontinue the CA course for a period of at least three months, the termination of articles be permitted, provided that the medical grounds are such that warrant termination of Articleship.
k) In the event of misconduct involving moral turpitude, gross negligence or unsatisfactory performance of the articled assistant, his articles shall be liable to be terminated by his principal besides being cancelled or extended for such period as may be decided by the Institute. Board of Studies to decide and enumerate the acts constituting misconduct.
l) Termination of articles be permitted on such other justified circumstances as may be deemed genuine by the Council.
m) While forwarding the form no. 109 the principal shall state specifically the clause (the relevant clause mentioned above) under which the articles have been terminated.
Saturday, March 28, 2009
Saturday, March 21, 2009
AS 11 : The burning Issue.
The economies of the globe are feeling the pinch of Recession and given the magnitude of meltdown, there is no surprise that India Inc. is trying its best to save its financials ( Profit and Loss Account and Balance Sheets) from bleeding. The Export service has already dived enough and the future appears to be no better. Many Indian Companies have exposure in foreign markets and Financial instruments denominated in Foreign currencies.
The accounting regulator requires that the foreign currency liabilities to be marked to market (to be simply put the amount of resource outflow that would be required to settle the liability as on the balance sheet date).(AS 11 requires foreign currency monetary assets and liabilities to be measured at the exchange rate on each balance sheet date. Any change in a monetary asset or liability that arises because of exchange rate variation is to be taken to the P&L account).
The rupee has depreciated sharply in the recent past. The companies having foreign currency liabilities need to mark the liabilities to market which means that the loss on MTM has to be charged to the profit and loss account. A simple example: ABC ltd borrowed $ 1,00,000/-( $1= INR 40). On the balance sheet date USD 1 is at Rs 52.This would mean that the equivalent INR liability would increase by Rs 12,00,000/- and the entire amount has to be charged to Profit and Loss account as a foreign currency loss. This would obviously change the face of Profit and Loss account.
However the Schedule VI of Companies Act 1956 allows companies to add the increase in Liability to the coressponding asset which was financed by the loan. In the above case if the loan was taken to purchase a Machinery, the company can add Rs. 12,00,000/- to the cost of the asset. This would mean that the company can show profits higher by Rs.12,00,000/-(less depreciation).
Though the Accounting Standards issued by the ICAI are mandatory in nature, in case of any difference between an AS and any provisions of Act, the Act would supercede the Accounting Standard. This means that companies are free to follow Schedule VI of the companies Act. Earlier when Rupee had appreciated, companies had no problems whatsoever in following the Accounting Standard 11.
The revised AS 11 is one of those standards that is almost fully in conformity with IAS 21, the corresponding international standard. Abandoning AS 11 would raise serious questions about the commitment of Indian companies to follow IFRS.
So India Inc. should not look at the volatility resulting from AS 11 from a narrow perspective. If financial performance is volatile, the function of accounting is to report that volatility. As Indian standards converge with IFRS, there will be a lot more volatility in the reported profit. A good accounting system should bring out the underlying volatility of a business, and not seek to hide it from investors and other users of financial statements. Volatility in the foreign exchange markets can be managed by hedging. Let us not fiddle with accounting to fix that problem.
The accounting regulator requires that the foreign currency liabilities to be marked to market (to be simply put the amount of resource outflow that would be required to settle the liability as on the balance sheet date).(AS 11 requires foreign currency monetary assets and liabilities to be measured at the exchange rate on each balance sheet date. Any change in a monetary asset or liability that arises because of exchange rate variation is to be taken to the P&L account).
The rupee has depreciated sharply in the recent past. The companies having foreign currency liabilities need to mark the liabilities to market which means that the loss on MTM has to be charged to the profit and loss account. A simple example: ABC ltd borrowed $ 1,00,000/-( $1= INR 40). On the balance sheet date USD 1 is at Rs 52.This would mean that the equivalent INR liability would increase by Rs 12,00,000/- and the entire amount has to be charged to Profit and Loss account as a foreign currency loss. This would obviously change the face of Profit and Loss account.
However the Schedule VI of Companies Act 1956 allows companies to add the increase in Liability to the coressponding asset which was financed by the loan. In the above case if the loan was taken to purchase a Machinery, the company can add Rs. 12,00,000/- to the cost of the asset. This would mean that the company can show profits higher by Rs.12,00,000/-(less depreciation).
Though the Accounting Standards issued by the ICAI are mandatory in nature, in case of any difference between an AS and any provisions of Act, the Act would supercede the Accounting Standard. This means that companies are free to follow Schedule VI of the companies Act. Earlier when Rupee had appreciated, companies had no problems whatsoever in following the Accounting Standard 11.
The revised AS 11 is one of those standards that is almost fully in conformity with IAS 21, the corresponding international standard. Abandoning AS 11 would raise serious questions about the commitment of Indian companies to follow IFRS.
So India Inc. should not look at the volatility resulting from AS 11 from a narrow perspective. If financial performance is volatile, the function of accounting is to report that volatility. As Indian standards converge with IFRS, there will be a lot more volatility in the reported profit. A good accounting system should bring out the underlying volatility of a business, and not seek to hide it from investors and other users of financial statements. Volatility in the foreign exchange markets can be managed by hedging. Let us not fiddle with accounting to fix that problem.
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