Future of Accountancy Profession

Image result for future of accountant professionFuture of Accountancy Profession

Accountancy profession will face significant challenges in coming times with the evolving technologies, globalization and new form of regulations. Along with tough challenges come exciting opportunities which accountants in business and practice are going to face. Emerging technologies and global trends are definitely reshaping the accountancy profession in many countries across the world including India, China, and Europe etc.

The new changes and challenges demands better marketing and branding of the accountants. A survey from ABN says ‘87% of the respondents thought that the accountants needed to market themselves better’. It is demand of the profession that accountants build of brand of themselves or the company to gain belief of the respondents. They would not just give you world as soon as they meet you. They would first like to know more about you, gain confidence that you are reliable and then an accountant can expect work from them. It is very important to build good relationship, “Accountants need to be multi-disciplinary and to acquire and develop skills and knowledge such as psychology, leadership, negotiation, critical thinking and creativity,” says Fung.

With the automation handling basic work, Accountants now have much time left with them to learn new and smart technologies to enhance their traditional approach of working. Smart software includes cloud computing, greater use of social media etc. This will lead to better outsourcing and engagement with stakeholders and help reaching broader communities.  Though accountancy is going to change radically in future but the change will be slow since people still rely on its stability. “It’s not a future where there’s nothing for people to do, but it is a future where the sorts of things that they do are quite different to what has been done traditionally” says Daniel at ICAS Conference 2017.

Accountants will have to be smarter and learn more technical and integrative skills because this change will definitely give birth to more exciting and new opportunities and exposure to the accountants.

Skills which would be required by accountants to align with the future changes:

  • Communication and relationship

Strong communication will lead to good relationships. A successful must be able to explain complex issues in a lucid manner. Building relationship with client is important to gain their confidence and this helps a lot in profession.

  • Technologically updated

Accountants must keep abreast of the latest technologies bringing in automation and taking over the traditional way of working. Because no matter how much we develop the systems and machine, there would always be a need of human intervention to make it reliable and stable. An accountant must be able to suggest and advice clients and bosses to get the best out of technology.

  • Flexible and adaptive

The best in the profession are those who are well prepared for the change and welcome it with open hands. And this is tested even more when the pace of change is accelerating. Ability to adapt is the sign of a good accountant.

Disclaimer: The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances; before making any decisions do consult your Professional / tax advisor. For misrepresentation or interpretation of act or rules Author does not take any responsibility. Neither the author nor the firm accepts any liability for the loss or damage of any kind arising out of information in this document or for any action taken in reliance there on. carajput.com is committed to helping entrepreneurs and small business owners to start, manage and grow their business with peace of mind. Our goal is to support the entrepreneur on legal and regulatory requirements and to be a partner throughout the entire business life cycle, offering support to the company at every stage to ensure that it is compliant and consistently growing. Hope the information will assist you in your Professional endeavors. For query or help, contact: info@carajput.com or call at 09811322785/4 9555 5555 480)

Elements of Financial Statements

Image result for financial statementThe financial elements of a financial statement are broadly classified into five categories. These are grouped according to the monetary characteristics they possess. Let’s have a brief understanding of all five.

Assets

An asset is a resource (either tangible or intangible) which is in control of the enterprise to derive monetary benefits from the use of it. Some of the points to be remembered are:

  • An asset should not necessarily have a physical existence.
  • An asset need not necessarily be owned. It should only be in control of the enterprise. An asset taken on lease from its owner will not be mentioned in the books of theowner but to whom it is in control of or leased to.
  • In order for an asset to be recognized, there should be sufficient control over it. For example copyrights, patents, trademarks etc.
  • An asset in order to be called an asset should be able to reap future financial benefits. An asset who ceases to have any value in a current accounting period cannot be termed as an asset.
  • An asset’s value or cost should be easily calculable or measurable.

Liabilities

Liability is defined as an obligation of an enterprise that arose as a result of past events. Some of the important points to be remembered in its context are:

  • A liability is recognized with the evidence shown in the balance sheet date.
  • Certain provisions like provision for depreciation, provision for bad and doubtful debts and other provisions are not considered aliability but rather as a reduction in the value of theasset.

Equity

Equity can be defined as the remaining interest of an enterprise over its assets after deduction of liabilities from it. In short, equity is the excess of aggregate assets over aggregate liabilities.

Income

Income can be:

  • any increase in the economic benefit as a result of inflow or encashment of asset
  • Increase in equity with the decrease in liability.

Income also includes the revenues and gains. Revenue is an income which arises during the ordinary course of business whereas,a gain is an income which may or may not arise during the normal course of business.

Expense

The expense is an antonym of income. Following are considered as an expense:

  • Any decrease in the economic benefit as a result of outflow
  • Deterioration of assets

The expense is defined as the charges incurred in the ordinary course of business like wages paid, rent paid etc., whereas losses may or may not incur in the ordinary course of business. For example loss on the sale of fixed assets. Expenses are shown on the debit side of profit and loss A/C.

Disclaimer:

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances; Before making any decisions do consult your Professional / tax advisor. For misrepresentation or interpretation of act or rules Author does not take any responsibility. Neither the author nor the firm accepts any liability for the loss or damage of any kind arising out of information in this document or for any action taken in reliance there on. The author is a Chartered Accountant and the Chief Gardener & Founder Director of Rajput Jain & Associates , a leading Tax & Investment Planning Advisory Service Provider. His blog can be found at https://carajput.com/blog/For any query you can write to info@carajput.com. Hope the information will assist you in your Professional endeavors. For query or help, contact:   info@carajput.com or call at 09811322785/4 9555 5555 480)

Disclaimer: The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances; before making any decisions do consult your Professional / tax advisor. For misrepresentation or interpretation of act or rules Author does not take any responsibility. Neither the author nor the firm accepts any liability for the loss or damage of any kind arising out of information in this document or for any action taken in reliance there on. carajput.com is committed to helping entrepreneurs and small business owners to start, manage and grow their business with peace of mind. Our goal is to support the entrepreneur on legal and regulatory requirements and to be a partner throughout the entire business life cycle, offering support to the company at every stage to ensure that it is compliant and consistently growing. Hope the information will assist you in your Professional endeavors. For query or help, contact: info@carajput.com or call at 09811322785/4 9555 5555 480)

CONDONATION OF DELAY SCHEME, 2018 (General Circular No.16/2017 dated 29/12/2017)

As par sec 92 of the Companies Act, 2013 provides that every company shall prepare an annual return in the prescribed form. The Annual return shall be signed by a director and the company secretary, or where there is no company secretary, by a company secretary in practice. Every company shall file with the Registrar a copy of the annual return, within sixty days from the date on which the annual general meeting is held.

Disqualification of a director

As par sec164 (2) provides that no person who is or has been a director of a company which has not filed financial statements or annual returns for any continuous period of three financial years shall be eligible to be re-appointed as a director of that company or appointed in other company for a period of five years from the date on which the said company fails to do so.

Sec- 167(1) (a) provides that the office of a director shall become vacant in case he incurs any of the disqualifications specified in sec-164 i.e., failure to file annual returns for any continuous period of three financial years.

Rule 14 of the Companies (Appointment and Qualification of Directors) Rules, 2014 provides that every director shall inform to the company concerned about his disqualification, if any, under section 164 (2) in Form DIR – 8

Action of MCA in disqualifying directors.

The Ministry of Corporate Affairs in September 2017 identified 3, 09,614 directors associated with the companies that had failed to file the financial statements or annual returns in the MCA 21 online registry for a continuous period of three financial years 2013 – 14, 2014 – 15, 2015 – 16 in terms of provisions of section 164(2) read with section 167 (1) (a) of the Act and they were barred from accessing the online registry.  A list of such directors was also published on the website of Ministry of Corporate Affairs.

Condonation of delay scheme, 2018

Consequent of the action made by MCA disqualifying the directors of the companies, there have been a spare of representations from industry, defaulting companies and their directors.

The Ministry of Corporate Affairs has announced a onetime settlement scheme for companies that saw over three lakh directors disqualified from their boards, with a view to giving an opportunity for the non-compliant defaulting companies to rectify the default

This scheme is applicable to all defaulting companies, other than the companies which have been struck off or whose names have been removed from the register of companies under section 248(5) of the Act. A defaulting company is permitted to file its overdue documents which were due for filing till 30.06.2016 in accordance with the provisions of this scheme.

Defaulting companies

The expression ‘defaulting company’ is defined as a company which has not filed its financial statements or annual return as required under the Companies Act, 1956 or Companies Act, 2013, as the case may be, and the Rules made there under for a continuous period of three years.

Overdue documents

The expression ‘overdue documents’ is defined as the financial statements or the annual returns or other associated documents, as applicable, in the case of a defaulting company.

The following are the overdue documents-

  • Form No. 20B/MGT-7 – Form for filing Annual return by a company having share capital;
  • Form 21A/MGT-7 – Particulars of Annual Return for the company not having share capital;
  • Form 23AC, 23ACA, 23AC-XBRL, 23ACA-XBRL, AOC – 4(CFS), AOC (XBRL) and AOC -4 (non-XBRL) – Forms for filing balance sheet/financial Statement and profit and loss account;
  • Form 66- Form for submission of compliance certificate with the Registrar;
  • Form 23B/ADT – 1 – Form for intimation for appointment of auditors.

PROCEDURE

Procedure to be followed under this scheme-

  • The DINs of the disqualified directors de-activated shall be temporarily activated during the validity period to enable them to file the overdue documents;
  • The defaulting company shall file the overdue documents paying the statutory filing fee and additional fee payable.
  • The defaulting company after filing the documents under this scheme shall seek condonation of delay by filing e-CODS 2018 along with a fee of –Rs 30,000/- as prescribed under the Companies (Registration Offices and Fee) Rules, 2014  well before the last date of the scheme
  • The DINs of the directors associated with the defaulting companies that have not filed their overdue documents and the e-form CODS and these are not taken on record in the MCA – 21 registry and are still found to be disqualified on the conclusion of the scheme shall be liable to be deactivated on the expiry of the scheme.
  • If the name of the company is removed from the register of companies under sec-248 of the Act and if the said company has filed application for revival under sec-252 up to the date of the scheme, the Director’s DIN shall be re-activated only NCLT order of revival subject to the company having filing all overdue documents.

Period of the scheme

The scheme shall come into force with effect from 01.01.2018 and shall remain in force up to 31.03.2018.

Powers of Registrar

The Registrar concerned shall withdraw the prosecution(s) pending if any before the concerned court(s) for all documents filed under the scheme.

This scheme is without prejudice to action under section 167(2) of the Act or civil and criminal liabilities, if any, of such disqualified directors during the period they remained disqualified.

At the conclusion of the scheme the Registrar shall take all necessary actions under the respective Act against the companies who have not availed themselves of this scheme and continue to be in default in filing the overdue documents

The e-Form CODS 2018 would be available from 20.02.2018 or an alternate date, which will be intimated by the ministry .

Disclaimer: The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances; before making any decisions do consult your Professional / tax advisor. For misrepresentation or interpretation of act or rules Author does not take any responsibility. Neither the author nor the firm accepts any liability for the loss or damage of any kind arising out of information in this document or for any action taken in reliance there on. carajput.com is committed to helping entrepreneurs and small business owners to start, manage and grow their business with peace of mind. Our goal is to support the entrepreneur on legal and regulatory requirements and to be a partner throughout the entire business life cycle, offering support to the company at every stage to ensure that it is compliant and consistently growing. Hope the information will assist you in your Professional endeavors. For query or help, contact: info@carajput.com or call at 09811322785/4 9555 5555 480)