The Hindu Business Line : CA employee in accounting firm cannot attest

THE Central Council of the Institute of Chartered Accountants of India (ICAI) has shot down a proposal to allow an employee chartered accountant (CA) in a firm of chartered accountants to undertake attest functions.

"After lot of debate, the Council decided that an employee CA working in a chartered accountancy firm should be treated on par with a member in industry and therefore not be allowed to discharge attest function," Mr G. Ramaswamy, ICAI Central Council Member, told Business Line.

The council, which met here last week, also decided against increasing the existing limit on the number of tax audit assignments that could be accepted by a CA for a financial year. The ICAI had, more than two decades ago, placed the limit of tax audit assignments at 30.

"The council reviewed the issue once again. Keeping in view the need to maintain quality work and also provide opportunity for younger members of the profession, it was decided that the existing limit would be continued and not increased," Mr Ramaswamy said.

As regards the Madras High Court order that ruled the institute's move to place restrictions on the number of tax audits that a chartered accountant could accept as "arbitrary" and in violation of the Constitution, the ICAI plans to move the Supreme Court in appeal against this order.

Meanwhile, the Central Council had at its meeting last week cleared Accounting Standard Interpretations (ASIs), which enjoy the status of an accounting standard in the eyes of the Institute.

ASIs are on `Turnover in case of contractors' (new ASI), `Accounting for taxes on income in the situation of tax holiday under Section 80-IA and Section 80-IB' (revised ASI) and `Disclosure of Segment Information' (revised ASI).

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