Posts Tagged ‘audit’
India’s overall growth of gross domestic product (GDP) at factor cost at constant prices, as per advance estimates was 8.5 per cent in 2010-11, representing an increase from the revised growth of 8 per cent during 2009-10, according to the monthly economic report released for the month of July 2011 by the Ministry of Finance. The index of industrial production (IIP) rose to 8.8 per cent in June 2011, year-on-year, on back of manufacturing and within that, the capital goods sub-segment. During April-June 2011-12, the IIP growth was registered at 6.8 per cent as compared to 9.6 per cent during 2010-11.
India has entered the club of top 20 exporters of goods and reclaimed its position among top 10 services exporters in 2010. India’s goods exports rose by 31 per cent in 2010, helping it to improve its world ranking moving up two places to 20 from 22 in 2009.
India’s FDI gathered momentum with the inflows growing by 310 per cent in June 2011 to touch US$ 5.65 billion. It is the highest monthly inflow during the last 11 years. The total FDI stood at US$ 16.83 billion during January-June 2011, nearly 57 per cent higher than the US$ 10.74 billion received during the same period last year.
The eight core infrastructure industries grew by 5.2 per cent in June 2011 as compared to the growth of 4.4 per cent in June 2010. In addition, exports in terms of US dollar, increased by 46.4 per cent during June 2011. On the back of such facts, India’s GDP is projected to continue to grow at a brisk pace of 8.8 per cent in 2011-12.
India has been ranked at the second place in global foreign direct investments (FDI) in 2010 and is expected to remain among the top five attractive destinations for international investors during 2010-12,
Non-resident Indian (NRI) inflows in the first quarter of 2011-12 has witnessed a rise of 38 per cent as compared to the same period in 2010-11. NRIs invested US$ 1.54 billion in various NRI deposit schemes during April-June 2011.
India’s foreign exchange (Forex) reserves have increased by US$ 1.6 billion to register US$ 318 billion during the week ended August 19, 2011, according to data released by the Reserve Bank of India (RBI). The increase in Forex is largely attributed due to valuation changes.
The Government has approved fund raising worth Rs 60,950 crore (US$ 13.24 billion) by companies through external commercial borrowings (ECB) or foreign currency convertible bonds (FCCB) for infrastructure projects in the financial years 2009-2011.
India’s merchandise exports have registered an increase of nearly 82 per cent during July 2011 from a year ago to touch US$ 29.3 billion, according to a release by the Ministry of Commerce and Industry. Exports during April-July 2011 reached US$ 108.3 billion, up 54 per cent over the same period a year ago.
The Indian automobile industry, the seventh largest in the world, has currently estimated to have a turnover of US$ 73 billion, accounting for 6 per cent of its GDP, and is expected to record a turnover of US$ 145 billion by 2016. India’s automobile industry is expected to grow by 11 to 13 per cent in the fiscal year ending March 2012, according to Pawan Goenka, President, SIAM. The Indian automakers sold 143,370 cars in June 2011, added SIAM.
Demand for two-wheelers has increased by 16 per cent in June 2011 to over 880,000 units, as compared to 761,000 units in June 2010, according to data released by six of the eight domestic two-wheelers manufacturers.
The growth of Indian agriculture and allied sector was a top agenda in Budget 2011-12 presented by Mr Pranab Mukherjee, the Union Finance Minister. He has estimated that the agriculture and allied sector would grow by 6 per cent in 2011-12.
Software as a Service (SaaS) is estimated to grow by 20.7 per cent in 2011 amounting close to Rs 538 crore (US$ 116.85 million) as compared to 2010 where it was close to Rs 445 crore (US$ 966.60 million), according to IT advisory firm Gartner Inc.Approximately 75 per cent of SaaS delivery can be regarded as cloud services as per Gartner, which is on its way to exceed 90 per cent by 2015. Customer relationship management (CRM) is the largest market for SaaS, which is expected to reach Rs168.83 crore (US$ 36.67 million) in 2011 to represent 32 per cent of the total CRM market.
Growth Potential Story
India’s consumption growth story is expected to maintain its course of about 14 per cent growth over the next three years driven by three factors-inclusiveness, mix changes and specific consumption categories, as per senior analysts Vijay Chugh, Ashvin Shetty and Shariq Merchant in the report ‘The Indian Consumer: a robust operator in an uncertain world’.
India will emerge as the second largest steel producer by 2013 with an installed capacity of 120 million tonnes (MT), riding on high levels of growth, construction, housing, real estate, automobiles and agriculture, according to Mr Beni Prasad Verma, Steel Minister. The demand for steel in the country is growing at an average of 10 per cent, which may even exceed to 12 per cent in the near future.
The number of millionaire households in India will grow from 2,86,000 to 6,94,000 between 2011-2020, at a growth rate of 143 per cent, as per a study by the Deloitte Center for Financial Services. Among emerging markets, India is likely to have the highest per capita wealth among millionaires with US$ 4.25 million — placing it ahead of the US. In comparison to other BRIC (Brazil, Russia, India and China) nations, India is likely to experience the largest growth at 405 per cent in total wealth held by the millionaires.
The International Accounting Standards Board decided not to extend the relief from restatement of comparative figures currently provided by IFRS 9, which allows an entity not to restate comparative figures if it decides to adopt the standard before 2012.The International Accounting Standards Board has proposed in its Exposure Draft Mandatory Effective Date of IFRS 9 to move the mandatory effective date of IFRS Financial Instruments to annual periods beginning on or after 1 January 2015.
Earlier application would continue to be permitted. The ED does not address other specific transition issues for IFRS 9, including the prohibition against applying IFRS 9 to items that have already been de-recognized at the date of initial application, which the IASB had indicated it may reconsider. The ED does not discuss how the effective date of IFRS 9 should relate to the effective dates of other projects but confirms the importance of the timing of the insurance project (IFRS 4 Phase II) when setting an effective date.
The ED poses questions for public comment on the proposed date of 1 January 2015 and the IASB’s tentative decision not to change the current requirement in IFRS 9 on comparative figures. The comment period of the exposure draft closes on 21 October 2011.
The IASB has published an ED proposing to defer the mandatory effective date of IFRS 9 to annual periods beginning on or after 1January 2015, with earlier application permitted. The comment period of the ED closes on 21 October 2011. The IASB recently extended its time line for IFRS 4 Phase II and has not yet set a publication date for the insurance standard.
The IASB recently extended its IFRS 4 Phase II timetable and now plans to make a decision on whether to re-expose or move to a review draft of the standard by the end of 2011, or during the course of 2012. It will set a publication date for a final IFRS 4 Phase II standard in due course. The deliberations on the insurance project are ongoing and the IASB has not yet made a decision on the effective date for the future IFRS 4 Phase II standard.
Extension of relief from the requirement to restate comparative figures until the mandatory effective date of IFRS A single effective date for all the phases of IFRS 9, as well as the revised IFRSs on insurance contracts, revenue recognition, and leasing. Many insurers asked the IASB to delay IFRS 9 to achieve alignment with IFRS 4 Phase II.
First of all, the delay of the IFRS 9 effective date gives insurers more time to prepare for IFRS 9. Additionally, allowing insurers sufficient time to make the necessary system changes and to prepare adequately for transition. Considering that the IASB does not expect to issue an IFRS 4 Phase II standard in 2011, it would be impossible to fully align both standards for adoption under the effective date currently in IFRS 9 (1 January 2013)
The current recession has business on edge due to the length of the recession period. Since 1854, the average length of a U.S. recession has been 17 months from peak to its low, according to the National Bureau of Economic Research. For the purpose of perspective, the great depression lasted 43 months. Our current recession started in December 2007 and the end is not yet in sight. And when it recovers, economists say it will be gradual. To compound the problem, the liquidity crisis continues making it difficult for markets to pick up again and overturn the crisis.
The trends we anticipate in the near future are:
All businesses as well as accounting firms will boost the use of cloud computing, SaaS, portals and hosted solutions. This rapid changeover will fuel the need for higher levels of data security, and online filing demands.
Microsoft 7 and Office 2010 will fuel replacement of dated computer equipment. Many firms will replace dated computer equipment this year. Trends are towards dual monitors, laptops and smart phones and away from traditional desktop computing.
Business development and new business acquisition are back in vogue. Most companies are now focusing on business development and new business acquisition. This is a shift away from staffing and recruitment of a couple years ago.
Evolution towards paperless offices will continue. Much like the evolution towards online filing, true paperless is seldom attained and is an evolutionary process. Those that embarked on paperless years ago will move further down this path. Many on the fence will test the waters this year but will incorporate paperless practices selectively.
Current trends in accounting will continue such as:
Web and intranet / internet applications, web based accounting, CRM, payroll and HR systems, e-commerce, e-procurement systems, cloud services / SaaS, asp, hosted web based systems.
Multiple ways to access web based systems e.g.: pc, laptop, PDA’s, handhelds, mobile phones, shared service centers providing accounting, payroll and human resource services, real-time processing, to provide immediate information to users, increased automation and seamless access with open web-based systems and systems supporting global business expansion
Much innovation is anticipated in the immediate future, some of the business best practices include:
Improved business efficiency from changes in business processes and reduction of manual data handling, reduced transaction costs and paper usage, faster access to information, rapid growth of data volumes, due to additional systems, numbers of PC’s, growth in email and archiving requirements. Increased data storage requirements combined with attempts to control data growth e.g.: by rationalizing the number of servers, email limits, freeing up of management time, enabling analysis and direction with more relevant information to manage business and increased information sharing within the organization and the use of cross departmental teams.
Increased co-operation between organizations leading to:
Reduced day-to-day operational costs for Finance, Payroll and HR functions and the HR department taking on a more strategic role
The intranet / internet enabled accounting software and systems will continue to grow in the direction of:
- Web based accounting software with a browser ‘front end’
- Automating routine accounts administration
- Web services
- e-procurement, e-commerce, online payment and internet expenses systems integrated within accounting software
- Web interfaces eg from e-commerce systems
- Workflow functionality integrated within accounting software
- Accounting employee portals containing all work tasks in one location
- Manager Self Service (MSS) tools in accounting software eg for monthly performance monitoring and reporting, budgets, expenses and travel authorizations
- Electronic payments
- Improving reporting, analytics, performance management and business intelligence eg slice and dice financial information, identify cost savings
We will also see continued growth in non-web based accounting software such as:
Financial and accounting regulations e.g.: IFRS, Sarbanes-Oxley, e-filing
System functionality and tools will either be purpose built or added to existing systems to assist with regulatory compliance e.g.: automated reconciliation tools, records management and documentation applications, security monitoring and control, repository and storage products.
Costs for financial and accounting regulation will be rationalized, Integration with other associated accounting software modules e.g.: CRM. Efficiency in scalability will greatly improve – accounting software such as ERP that was available for larger organizations will be redesigned for SME businesses and accounting software designed for SME businesses will increase functionalities and extend capability to be suit larger businesses.