The Institute of Chartered Accountants of India, abbreviated as ICAI, is India's largest professional accounting body under the administrative control of Ministry of Corporate Affairs, Government of India. It was established on 1 July 1949 as a statutory body under the Chartered Accountants Act, 1949 enacted by the Parliament for promotion, development and regulation of the profession of Chartered Accountancy in India.
"The Institute of Chartered Accountants (ICAI) of India plays a significant role in maintaining accounting, auditing, and ethical standards in India, contributing to the stability and transparency of the country’s financial system.”
Members of the institute are known as ICAI Chartered Accountants or Indian CAs (either Fellow member - FCA, or Associate member - ACA). However, the word chartered does not refer to or flow from any Royal Charter. ICAI Chartered Accountants are subject to a published Code of Ethics and professional standards, violation of which is subject to disciplinary action. Only a member of ICAI with valid certificate of practice can be appointed as statutory auditor of a company under the Companies Act, 2013 and tax auditor under Income-tax Act, 1961. The management of the institute is vested with its council with the president acting as its chief executive authority. A person can become a member of ICAI and become a financial (i.e. statutory) auditor of Indian Companies. The professional membership organization is known for its non-profit service. ICAI has entered into mutual recognition agreements with other professional accounting bodies worldwide for reciprocal membership recognition. ICAI is one of the founder members of the International Federation of Accountants (IFAC), South Asian Federation of Accountants (SAFA), and Confederation of Asian and Pacific Accountants (CAPA). ICAI was formerly the provisional jurisdiction for XBRL International in India. In 2010, it promoted eXtensible Business Reporting Language (XBRL) India as a section 8 Company to take over this responsibility from it. Now, eXtensible Business Reporting Language (XBRL) India is an established jurisdiction of XBRL International Inc.
The Institute of Chartered Accountants of India was established under the Chartered Accountants Act, 1949 passed by the Parliament of India with the objective of regulating the accountancy profession in India.Act No. XXXVIII of 1949. See "Chartered Accountants Act 1949 as amended in 2006" ICAI is the second largest professional accounting body in the world in terms of number of membership and number of students after the AICPA.Ranking of Accountancy bodies as per World Ranking Guide Blog It prescribes the qualifications for a Chartered Accountant, conducts the requisite examinations and grants Certificate of Practice. In India, accounting standards and auditing standards are recommended by the National Financial Reporting Authority (NFRA) since its foundation in 2018 ( previously it was ICAI's role) to the Government of India which sets the Standards on Auditing (SAs) to be followed in the audit of financial statements in India.
History
The Indian Companies Act, 1913 passed in pre-independent India prescribed various books which had to be maintained by a Company registered under that Act. It also required the appointment of a formal Auditor with prescribed qualifications to audit such records. In order to act as an auditor, a person had to acquire a restricted certificate from the local government upon such conditions as may be prescribed. The holder of a restricted certificate was allowed to practice only within the province of an issue and in the language specified in the restricted certificate. In 1918 a course called Government Diploma in Accountancy was launched in Sydenham College of Commerce and Economics of Bombay (now known as Mumbai). On passing this diploma and completion of three years of articled training under an approved accountant, a person was held eligible for grant of an unrestricted certificate. This certificate entitling the holder to practice as an auditor throughout India. Later on, the issue of restricted certificates was discontinued in the year 1920.
In 1930, it was decided that the Government of India should maintain a register called the Register of Accountants. Any person whose name was entered in such register was called a Registered Accountant. Later on a board called the Indian Accountancy Board was established to advise the Governor General of India on accountancy and the qualifications for auditors. However, it was felt that the accountancy profession was largely unregulated, and this caused much confusion as regards the qualifications of auditors. Hence in the year 1948, just after independence in 1947, an expert committee was created to look into the matter.Government of India Notification No.22-A(8)47 dated 1 May 1948. Copy of the notification available in page 28, July 2010 edition of The Chartered Accountant journal This expert committee recommended that a separate autonomous association of accountants should be formed to regulate the profession. The Government of India accepted the recommendation and passed the Chartered Accountants Act in 1949 even before India became a republic. Under section 3 of the said Act, ICAI is established as a body corporate with perpetual succession and a common seal.
Unlike most other commonwealth countries, the word chartered does not refer to a royal charter, since India is a republic. At the time of passing the Chartered Accountants Act, various titles used for similar professionals in other countries were considered, such as Certified Public Accountant. This designation inherited a general public impression that Chartered Accountants had better qualifications than Registered Accountants. Hence the accountants were very stern in their stand that, the Indian accountancy professionals should be designated only as Chartered Accountants. After much debate in the Indian Constituent Assembly, the controversial term, chartered was accepted. When the Chartered Accountants Act, 1949 came into force on 1 July 1949, the term Chartered Accountant superseded the title of Registered Accountant. This day is celebrated as Chartered Accountants Day every year.
On 23 September 2019 chartered accountancy students organized protests under leadership of teacher CA Praveen Sharma, named "Dear ICAI please change" at over 200 institute branches across India and on social media demanding among other things right to re-checking of CA exam answer sheets. At present as per CA regulations, re-checking of answer sheets are not allowed. Students were demanding this right since 2018. A protest was also called in December, 2018 but after assurance by the council and formation of a committee to review the examination process the protest was called off. Students were able to gather support of many public figures which includes Congress leader Rahul Gandhi, Past President of ICAI Mr. N. D. Gupta, renowned accountant Mr. Motilal Oswal, Mr. Mohandas Pai, Mr. Raghav Chadha, etc. on social media.
Motto The motto of the ICAI is Ya Aeshu Suptaeshu Jagruti (Sanskrit), which literally means "a person who is awake in those that sleep". It is a quotation from the Katha Upanishad. It was given to the ICAI at the time of its formation in 1949 by Sri Aurobindo as a part of its emblem. CA. C. S. Shastri, a Chartered Accountant from Chennai went to Sri Aurobindo and requested him through a letter to give an emblem to the newly formed Institute of which he was an elected member from the Southern India. In reply to this request, Sri Aurobindo gave him the emblem with a Garuda, the mythical eagle in the center and a quotation from the Upanishad: Ya Aeshu Suptaeshu Jagruti. The emblem along with the motto was placed at the first meeting of the Council of the Institute and was accepted amongst many other emblems placed by other members of the council.
Apart from its emblem, ICAI also has a separate logo for its members. As a part of a brand building exercise, ICAI introduced this separate new CA logo for the use of its members in 2007. The logo is free for use by all members of ICAI subject to certain conditions. The logo was launched by the then Minister of Corporate Affairs, Prem Chand Gupta at the occasion of the Chartered Accountant Day (1 July) in the presence of the then President of ICAI Sunil Talati. Members of ICAI cannot use the ICAI emblem, but they are encouraged to use the CA logo instead on their official stationery.
ICAI is a founder member of the International Federation of Accountants (IFAC), South Asian Federation of Accountants (SAFA), and Confederation of Asian and Pacific Accountants (CAPA) and International Innovation Network (IIN). ICAI is an Associate member of the Chartered Accountants Worldwide, and a member of International Valuation Standards Council (IVSC).
Through its Global Trade & Services Committee, ICAI has expanded its international footprint, establishing a presence across 85 global cities in 47 countries to enhance professional opportunities and global mobility for Indian CAs.
Membership Members of the Institute are known as Chartered Accountants. Becoming a member requires passing the prescribed examinations, 24 months of practical training and meeting other requirements under the Act and Regulations. The institute has 4,00,000 members currently.
Associates and fellows Generally, associates are members of the institute with less than five years of membership after which they become eligible to apply for fellowship. Some associate members, particularly those not in practice, often voluntarily chose not to apply to be a fellow due to a variety of reasons.
An associate member who has been in continuous practice in India or has worked for a commercial or government organization for at least five years and meets other conditions as prescribed can apply to the institute to get designated as a "Fellow". Responsibilities and voting rights of both types of members remain the same but only fellows can be elected to the council and regional councils of ICAI. Fellows are perceived as enjoying a higher status due to their long professional experience.
Practicing Chartered Accountants Any member wanting to engage in public practice has to first apply for and obtain a Certificate of Practice (COP) from the Council of ICAI.Section 6 of the Chartered Accountants Act, 1949 provides, "No member of the Institute shall be entitled to practice (whether in India or elsewhere) unless he has obtained from the Council a certificate of practice". Only members holding a Practicing Certificate may act as statutory auditors of Indian companies. Under section 288(2) of the Income Tax Act, 1961, a chartered accountant who holds a current certificate of practice (CoP), is considered an "accountant" and is therefore qualified to practice in tax audits required under section 44AB of the IT act.
Companies in India cannot practice profession of accountancy.
Role of Chartered Accountants Chartered accountants work in all fields of business and finance, including auditing, taxation, financial and general management. Some are engaged in public practice work, others work in the private sector and some are employed by government bodies.
Council of the institute