Page 12 - A Position Paper on Regulation of Accountancy Profession and Oversight Mechanism in India

of Chartered Accountants of India is “Partners in Nation Building”. This is an excellent
characterisation of the contribution of our profession of accountancy to the world.
Regarded as the backbone of Indian financial system, the ICAI has and is truly acting as a
partner in nation building.

(ii) ICAI through ‘The Chartered Accountants Act, 1949’ has been mandated to regulate the
accountancy profession in India which inter alia comprises:-
a. Laying down actionables in accounting and audit with well-defined education,

practical training and examination.
b. Registering members and practising firms and carry oversight on their extent of
compliance in performing professional work.
Chapter 1 c. Issuing standards on accounting, audit, ethics and rebuild guidance to ensure

quality of services.
d. To discipline and punish errant members and to enable pro-active reviews through
PRB, FRRB and QRB.

(iii) The sheer performance in upholding Public Trust by Accounting Profession has provided
a strong foundation to growth of Indian Economy, which has been credibly served by the
Chartered Accountancy profession. The CA profession takes pride in providing selfless
service to all segments of the society. The economy’s growth to nearly $ 3 trillion has been
ably supported by ICAI and its members with no frequent or significant abruptions. While
the Nation prepares itself for moving to a bigger league, the accountancy profession has
its own contribution to this progress march by providing a matured and reliable Financial
Reporting and related Governance System as ushered by the ICAI. Financial turmoil as
was witnessed in developed economies like US and others which despite a series of
reforms in their financial sector are still trying to grapple with subprime crises and virtual
collapse of the Financial Systems; has been negated in India, due to stellar contribution
of ICAI.

(iv) The strength of Chartered Accountant fraternity has grown significantly in recent

times. The total number of our members has increased to almost 284000 till date. Even
more remarkable is the overwhelming interest of students in the profession and their
enthusiasm to join the CA fraternity. Currently there are nearly 850000 CA students as
well. It is a moment of truth for the profession to be a fundamental edifice to the overall
process of national development. The Indian accounting profession through ICAI plays
its just and due role to position itself on a wider altar to activities which touch the very
core of a sustainable developmental framework. The banking system has been safe from
accounting scandals. The sub-prime crises affected all countries, but not India. Recent
scams like PNB did not show the involvement of audit profession.

(v) The profession has moved much beyond from merely playing an accountant role in

corporates to role of a strategist and has been contributing to the Government / various
regulators in its committees. It is truly adding value to the process of economic and
social development in country. Role of the Indian accounting profession is evolving and
lending credibility to financial systems and, so is well recognized worldwide. The same is
also evident from strength of regulatory resilience when amongst role of other Central
Financial Regulators like Reserve Bank of India, ICAI through its members and firms lent
crucial support in vulnerable times of the great financial crises when the Indian Financial
Markets remained insulated from the global turmoil. The significant FDI inflows have been
reflective of confidence in Indian economy thanks to the Indian Accounting Profession.
CAs have conducted themselves in manner to maximise governance and confidence
in Indian economy. Even when Accounting Standards (AS) were not mandatory for
companies to follow till 1998, ICAI has been ensuring same by putting responsibility on

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