Chartered Accountancy: India's most preferred profession
Duly qualified chartered accountants can expect to be confronted with a flood of opportunities in government service, industry, and private consultancy within the fast-track Indian economy
Bad draftsmanship and the sheer complexity of post-independence India’s tax legislation, which requires constant updation and amendment (according to eminent jurist, the late Nani Palkhivala, the Income Tax Act 1961 is the world’s most amended legislation), have made the services of chartered accountants indispensable to even the most modest businessmen and enterprises. Moreover as demand for financial information and accounting services bourgeons in the crystallising global economy, chartered accountancy firms and practitioners are prospering mightily. Little wonder chartered accountancy has displaced medicine as the most preferred choice of India’s growing middle class. Moreover according to the Company Act 1956, only chartered accountants (CAs) in professional practice can be appointed auditors of registered firms in India.
A CA’s job involves writing analyses of financial statements; auditing corporate/firms’ accounts, receipts, and bank statements; finalising business accounts; writing tax returns; making company valuations for amalgamation or liquidation; equity-related work; formulation of corporate budgets; designing companies’ financial structures; administrative duties such as representing corporates in negotiations with government and lawyers; and offering cost control advice and helping insolvent companies to wind up.
A duly qualified CA is an individual accepted as a member of the Institute of Chartered Accountants of India (ICAI) following completion of the final examination of the chartered accountancy study programme conducted by the institute. ICAI (New Delhi), the governing body of the profession in India, is the sole authority licensed to conduct the chartered accountancy study programme and certify CAs through its regional offices located in Mumbai, Chennai, Kolkata, and Kanpur. The institute has a board of studies which imparts tuition, training, and guidance to articled clerks.
ICAI’s study programme is designed to provide a blend of theoretical education and practical training over a period of three years to equip students with knowledge, ability, skills, and other qualities required of a professional accountant.
Students who have passed Plus Two can register for the ICAI study programme which comprises three modules — Professional Education Course I, Professional Education Course II, and the Final Examination. Registration for PE I and PE II is open throughout the year. However, as the examinations are held twice a year (May and November), students must register at least 10 months before each exam. Commerce graduates averaging over 50 percent and non-commerce graduates averaging over 55–60 percent are exempt from writing PE I and can register directly for PE II and the final examination.
After passing the PE II exam, aspiring CAs have to register as articled clerks/audit clerks for practical training. An articled clerk practices under a qualified CA for three years during which she studies for the final exam while entitled to a stipend of Rs.3,000–6,000 per month.
OPTIONS GALORE. Duly qualified CAs can expect a flood of opportunities in government service, industry, and private consultancy within the fast-track Indian economy. To start with, freshly minted CAs can expect to earn between Rs. 50,000–100,000 plus per year besides wide-ranging perquisites. Some top-rated firms pay between Rs.20,000–25,000 per month as starting salaries.
An enterprising chartered accountant is Mumbai-based Chandmal B. Chhajed who set up his own practice shortly after he passed ICAI’s final exam in 1968. Today, Chhajed & Co has five partners (all CAs), including himself with an 85 percent partnership stake, and a staff of 50 qualified personnel. A top-ranked student who has built a successful practice through 40 years of hard work and dedication, Chhajed boasts 1,000 clients on his roster.
“It was very tough to set up shop on my own but after the initial teething troubles my reputation grew and my clients’ list kept growing. Today, there’s enormous scope for private practice as tax laws are becoming more complex, prompting people to avail our services,” explains Chhajed.
In today’s business culture, CAs are much sought after and Chhajed is optimistic about the future of youth who are steadily entering the book-keepers’ profession. “For the determined, hard working, and averagely intelligent, cracking the CA exam is no longer a herculean task as high quality texts and coaching classes are available. Moreover, liberal new rules drafted by ICAI permit students to read for their graduation degree and qualify as CAs simultaneously. This will help bridge the demand-supply gap, but CAs will continue to be prized and highly priced for the foreseeable future,” predicts Chhajed.