For journal
President Message
Dear Members,
President’s Desk
Dear Professional Friends,
Wishing you and your loved ones a very Happy, Healthy and Prosperous New Year-2020
It’s New Year, friends As the New Year stands before us, So let’s all of us resolve to seize this opportunity and promise ourselves that we will strive towards happiness and make this world a better place to live in for ourselves and others around us.
I hope 2020 will mark the beginning of a new decade of hope, trust and well-being of our profession. I would like to emphasize certain recent developments in our profession that will have a great impact on the way we discharge our professional responsibilities and obligations.
ICAI Code of Ethics: The Code of Ethics issued by the ICAI was aligned with the International Ethics Standards Board for Accountants (IESBA) Code of Ethics 2005 for the first time in 2009. Now, after a gap of ten years, the ICAI has decided to revise the Code of Ethics applicable to the profession with effect from 1st April, 2020. As in the case of the code issued in 2009, this edition, too, is divided into two parts, Part A representing provisions of the IESBA Code of Ethics as suitably incorporated after modification, and Part B representing the domestic provisions of India governing the Chartered Accountants’ Act, 1949.
Part A of the Code of Ethics was revised in 2018 on the basis of the IESBA Code of Ethics, 2018 edition; and now the ICAI has proposed a revision of Part B of the Code of Ethics, 2019.
Various new provisions, clauses, sections have been proposed to be inserted in Part B such as: Responding to Non-Compliance of Laws and Regulations; provision of taxation services to the audit clients; prohibition on management responsibilities to the audit clients; restrictions on total fees from a client; duty of accountant in case of breach of Independence Standards; advertisement guidelines; guidelines on website and social networking sites; affiliations with networks; long association with firms and so on.
it is important for us to be aware of the changes to maintain the inclusive and ethical culture of our profession .
Report on Audit Quality Review (2018-19): Cases of financial irregularities continue to haunt the corporate world, both domestically and internationally, bringing to the forefront concerns on the need to improve the quality of audit services carried out by auditors. The Quality Review Board (QRB) of ICAI has being carrying out reviews of listed and other public interest entities and issuing a report on the observations from the Audit Quality Review carried out by them annually. This report of the QRB for reviews carried out during financial year 2018-19 was issued in October, 2019. It highlights the key findings and observations from reviews carried out on audit quality of 51 entities (which included 51 audit firms, 64 audit files and 22 industries) indicating the QRB’s approach, key trends, their expectations and other focus areas.
Though the reported observations are from reviews carried out on the said 51 entities, these deficiencies can act as check-points for others to improve their audit quality. The report highlights in detail non-compliance of SA,. I am sure this will make for interesting reading and help in improving the quality of audit services rendered by us.
Audit Quality Review (AQR) by NFRA: More recently, the NFRA carried out its first AQR on the statutory audit of IL&FS Financial Services Limited for F.Y. 2017-18. NFRA has verified the compliance of SA, assessing the audit quality control system of the audit firm and the extent to which the same was complied with in the performance of the audit. This report has made some startling observations and comments on the compliance of independence requirements, role of engagement partner, communication with those charged with governance, evaluation of risk of material misstatement, management’s written representations, evaluation of going concern assumptions and documentation of the audit quality control system. A reading of this report will also go a long way in overall improvement in the quality of services rendered by us.
Central Budget
Goods and Service Tax In order to curb tax evasion, the concept of e-Invoicing has been introduced under GST to be implemented in phased manner. Various portals have been set live for use of invoicing function by from 1st January 2020 for voluntary adoption. However from 1st April 2020, it is a mandatory requirement to generate invoices through e-Invoicing portal by taxpayers with aggregate turnover in a financial year exceeds Rs. 100 Cores. Late filing fees in respect of all pending GSTR1 for the period July, 2017 to November, 2019, will be waived off, if the forms are filed by 17 January 2020. Following key decisions were taken at 38th GST council meeting held on 18th December 2019 The last date for filing GSTR-9 and GSTR-9C for 2017-18 s t is further extended from 31 December 2019 to 31st January 2020 The restriction on availing ITC in respect of invoices/debit notes not reflected in GSTR-2A is further reduced from existing 20% to 10% of total invoices reflected in GSTR-2A
Corporate and Business Law On 3rd January 2020, Ministry of Corporate Affairs issued a notification amending the Companies (Appointment and Remuneration of Managerial Personnel) Rules which are effective from April 1st 2020. Prior to this amendment, the Rule 8A of the Rules provided that all the companies not covered under Rule 8[1] and having a paid-up share capital of Rs. 5 Crore or more shall have a whole-time company secretary. The amendment has substituted the rule by providing that every private company which has a paid-up share capital of Rs. 10 Crore or more shall have a whole time company secretary. Also, pursuant to section 204 read with Rule 9, every listed company and public companies having a paid-up share capital of Rs. 50 crore or more, or having a turnover of Rs. 250 crore or more shall annex a Secretarial Audit Report, given by a Practicing Company Secretary, with its Board Report. Postponement, every company having outstanding loans or borrowings from banks or public financial institutions of Rs. 100 crore or more are also required to annex the Secretarial Audit report. Further, Every listed company and every other public company having a paid-up share capital of Rs. 10 crore or more shall have whole-time key managerial personnel (which includes a company secretary). Direct Tax · CBDT has notified: revised FORM NO. 10DA (Report under section 80JJAA- Deduction in respect of employment of new employees, of the Income-tax Act, 1961). On 31st Jan, 2020 as the last date for payment of pending amount under Income Declaration Scheme (IDS) 2016 o Government designates special court under Black money law. · Annuities payable to NRI (Non Resident Indian)/ OCI (Overseas citizen of India) are subject to TDS at rates applicable as per the DTAA (Double Taxation Avoidance Agreements) of the country where the annuitant resides. Conclusion Decision is outcome of the thought process of an individual and success of each of them depends on cognitive ability, perception, history, creativity and many other factors. The Six thinking that theory by Edward de Bono explains six various thought process which every independent person contemplates before arriving at his decision. For example, an optimistic overseas the downfall and pessimistic misses an opportunity. The theory explains the conscious efforts before making a rational thought, this theory also helps a leader in getting the perception of his team before concluding the decision.
‘Professionalism: It’s NOT the job you DO, It’s HOW you DO the job.’
With Best Regards,
CA Dr. Dhavalagi C.R
President