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Showing posts from March, 2007

Are Accountants perceived like this

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ICAI unhappy with relaxation of audit norms

The first impression that come to mind when you read this statement

“Almost 35-40% of CA firms, especially the smaller ones, will be hit by the RBI directive,” said the ICAI president Sunil H Talati

Hey... This must be some Trade Union Leader.

Then you further read on

“It leaves the banking system open to malpractices and frauds. This is a dangerous situation,” Talati said. He ruled the RBI did not even consult the institute, which regulates the audit function in India. While the ICAI has already written to the banking regulator about its arbitrary decision and its adverse fallout on the banking industry, he said the matter was also being discussed at the institute’s ongoing central council meeting.

Well, Mr Tahati, the business has to decide how much reassurances are required on internal controls. At the end of the day, the banks auditors have to report on true and fair view of final accounts.

What surprises to me, in India, the Accounting has been controlled by ICAI. Just like monopoly…

"What an Awesome Reply, man!"

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There should be always humor at workplace. I picked this joke since this may happen during month end pressure. Will you have guts to tell your boss...


It was a hot meeting at the office conference hall. All the people from the department had been called. The V.P was all tensed up. The mood was so bad.My friend asked me, "Hey, what is this meeting all about?

I said, "Maybe, they will decide on when to have the next meeting."

People around smiled at each other. Then the V.P started talking. It was about the recent attrition rate, that was so high. Around 10 people had put in their papers - all experienced guys. It was the quarter-end and so, work was huge.

"If we do not complete the work on time, we need to be paying heavy penalty", said the V.P.

The V.P then turned to the manager and said, "Hey... take how much ever resources you want. Recruit or take them from other departments, butcomplete the work in another 25 days. Take people and complete it, man. "…

Difference between the legal form of the transactions and their substance

I came across a case study question on how to treat transaction and event in Financial statements as per UK FRS.

Question:

"On 1 October 2005 Angelino Ltd owned a freehold building that had a carrying amount of £7·5 million and had an estimated remaining life of 20 years. On this date it sold the building to Finaid for a price of £12 million and entered into an agreement with Finaid to rent back the building for an annual rental of £1·3 million for a period of five years. The auditors of Angelino have commented that in their opinion the building had a market value of only £10 million at the date of its sale and to rent an equivalent building under similar terms to the agreement between Angelino and Finaid would only cost £800,000 per annum. Assume any finance costs are 10% per annum.

Describe how the above transactions and events should be treated in the financial statements of Angelino Ltd for the year ended 30 September 2006. Your answer should explain, where relevant, the differe…

Activity based costing Collect Information

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We accountants have the fancy of solving the toughest management accounting problem in the examination just like forecasting of Mumbai weather. The above screenshot (click on the image to view it bigger) is a examination question from one of the professional examination.

I am not asking the readers to solve the problem and give right answers. But share comments as how you would prospose to gather information for "Actuals" especially for pt. 3 and pt 4.

You are the Management Accountant of Kickstart Ltd and your management has asked you to prepare Actual Profit & Loss and compare it with the budgeted accounts. How would you go about doing it.

Make assumptions and conclude.

Regards,

Santosh Puthran
AICWA

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