ICAI Full Form, Roles & Functions

ICAI is the statutory body for the regulation of the profession of Chartered Accountancy in India. The Chartered Accountants Act, 1949 (Act No. XXXVIII of 1949) established it. 

What is the Full Form of ICAI?

ICAI stands for Institute of Chartered Accountants of India. It was founded on 1st July 1949 under the Chartered Accountants Act 1949, and is the only licensing and regulating body of financial audit and Chartered Accountancy profession in India. It provides recommendations regarding accounting standards to be followed by the businesses to the National Advisory Committee on Accounting Standards.

This institute is the second largest professional body of CAs after the American Institute of Certified Public Accountants (AICPA). It functions under the Ministry of Corporate Affairs’ administrative control. Before an individual can become a member of this institute, they must pass the prescribed examinations, gain practical training and meet other mandatory requirements.

Motto of ICAI

The motto of Institute of Chartered Accountants of India is “Ya Aeshu Suptaeshu Jagruti”. It is a Sanskrit phrase that means "a person who is awake in those that sleep".

Roles & Functions of ICAI

The roles and functions of ICAI are outlined as follows:

• To license the CAs in India.

• To take appropriate actions against its members in case of misconduct or wrongdoing.

• It administers the Chartered Accountancy (CA) course, which is one of the most competitive examinations in the country.

• To maintain vigorous research and development divisions, release various publications, journals, newsletters and reports in various fields, such as accounting, taxation, finance, and business.

• To ensure that financial reporting and auditing across the nation maintain high standards of ethics, professionalism and integrity.

• ICAI boosts international cooperation among accounting bodies and professionals. To do this, it participates in various forums like South Asian Federation of Accountants, International Federation of Accountants (IFAC) and Confederation of Asian and Pacific Accountants.

Membership Structure of ICAI

The Institute of Chartered Accountants of India follows a hierarchical structure consisting of a Central Council, Regional Councils and Branches. The Central Council comprises 40 members. CAs elect a total of 32 council members. The Central Government elects the remaining 8 members. 

There are a total of 5 Regional Councils (RCs): Western India Regional Council (WIRC), Southern India Regional Council (SIRC), Eastern India Regional Council (EIRC), Central India Regional Council (CIRC), and Northern India Regional Council (NIRC). Each Regional Council consists of 30-40 elected members. 

The CAs residing within the respective regions elect the RCs’ members. Each RC oversees several branches located across various regions. Only ICAI members with valid membership numbers are eligible to vote. The Central Council members elect the President and Vice President of the ICAI.

Conclusion

The Institute of Chartered Accountants of India plays an important role in overseeing the CA profession. It makes sure that the CAs maintain financial integrity and ensure compliance while practicing their profession. It is the second largest body of CAs after the US-based American Institute of Certified Public Accountants. The Institute consists of a Central Council, 5 Regional Councils and Branches. Only the members with valid membership numbers are eligible to vote for council members.