A Big Legal Push to Reform the CA Profession [CA Suprio Ghatak]



#suprioghatak #rnarayanaswamy #icai

CA Dr Narayanaswamy R, retired Professor of Finance and Accounting, Indian Institute of Management, Bangalore, and Chair, Technical Advisory Committee of the National Financial Reporting Authority.

He says that the changes in the Chartered Accountants Act will improve accountability and governance in the audit profession.

The ICAI must shed its ‘Licence Raj’ baggage and become more relevant to the needs of the changing world; IIAs may not be a bad idea.

The key changes are –

  1. Discipline

  2. Governance and administration

Other points discussed include –

  1. CA training

  2. Disciplinary record

  3. Historical baggage

  4. CA in a changing world

  5. Indian Institutes of Accounting

The ICAI’s leadership needs to ponder and explain the reforms to its membership. It would be wise to read the proposed changes as a warning and respond maturely.

https://www.thehindubusinessline.com/opinion/cas-act-changes-are-a-warning-sign-to-the-icai/article65273660.ece

#suprioghatak #abhisheksanyal #rnarayanaswamy #icai

The following are the views of CA Abhishek Sanyal

I have been reading the viewpoints of seniors and fellow professionals about this sensitive issue. Yes, like each one of you I am worried. However I am having a separate view on this.

First. The disciplinary mechanism is being made more stricter and stronger. Abroad, like in the USA, Public Committee Accounting Oversight Board (PCAOB) is operational for many years. Many members of PCAOB are not CPAs. Maybe our Government has decided to follow this model. Only time will tell how it will be in the Indian context.

Second. As a micro and small CA practitioner falling in the sole proprietorship category what I realise year after year is that auditing might be our core competence in theory but in reality it is not. For very small CA practitioners tax consultancy especially GST Consultancy Services have been our main revenue generating opportunity since the last 5 years. It might sound harsh but it is the truth that a practicing CA will not survive in this market depending on the auditing profession alone.

Valuation is another good opportunity in the future.

Third. The issue regarding IIAs. In England they have their CA Institute The Institute of Chartered Accountants in England and Wales (ICAEW) as well as an IIA type institute called ACCA.

ACCA is a new body compared to the old ICAEW but I don't think that ICAEW's brand value or image has suffered because of ACCA. ACCA provides accountants mainly for the industry.

Our Chartered Accountants Act was enacted in 1949. Before that we had the concept of Registered Accountants or RAs. With the enactment of this Act in 1949 the existing RAs were given CA status and membership. So, we have such a precedence in India itself.

Fourth. Even if ICAI and IIA are kept separate, a CA qualifying from ICAI will have greater brand value and goodwill vis-à-vis that of IIA because of so many years of experience.

Last. In the medical profession also there are two separate bodies in India. Medical Council of India or MCI gives the MD /MS degrees in Post Graduation whereas the Ministry of Health gives DNB degrees in Post Graduation. One can qualify all these degrees separately.

Conclusion - Let us keep a watch on the situation and see what are the possible revenue generating opportunities professionally in the coming days.

Gone are the days of bank branch audits and concurrent audits. We have to accept this and move forward by diversifying. Our CA Final Curriculum had 8 subjects. So, it is better to think that each subject is our core competency rather than only auditing is.

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