Chartered Accountancy has emerged as one of the most prestigious and popular career options in growing economies like ours. It offers unlimited scope for growth, rewards and moolah .
Every country has its own Accountancy Association that regulates the number of Chartered Accountants. In India, the Chartered Accountants Act was passed in 1949, following which The Institute of Chartered Accountants of India (ICAI) was formed.ICAI is the examining and licensing body that regulates the CA course.
A chartered accountant is a person who is accepted as a member of the Institute of Chartered Accountants of India (ICAI) after having passed the Final examination of the Chartered accountancy course conducted by the institute.
A Chartered accountant specializes in accounting, auditing and taxation. According to the Company Act, only CA’s in professional practice are allowed to be appointed as auditors of companies in India.
Nature of Work
CAs handles just about every aspect of finance – for both, organisations as well as individuals. “A CA conducts audits, provides financial advice in terms of investments, more specifically, with regard to the percentage of income that needs to be invested to minimise tax and helps in filing returns,” explains CA, P S Sanghvi. CAs specialize in accountancy, auditing, taxing, cost accountancy and law. “Updating oneself with the latest laws is very important. Although charted accountancy is looked at as a career in finance, I would say 50 per cent of the job we do is based on law,” affirms Sanghvi. Says Sanjeev Kapoor, CA, S P Kapoor & Company, “Today there are many new areas we cater to. For example, apart from accounting and auditing, today we are also work in the areas such as loan financing and project financing.”
Furthermore, with improved technologies, changing laws, and MNCs setting foot in the Indian market, several new fields of practice are emerging. Acknowledging this, Sanjeev Vora, a CA with 20 years of experience, says, “Today software consultancy is a big thing in the industry. With everything getting computerised, we work on financial and accounting softwares. IT is now a compulsory subject in the course itself.”
Nevertheless, irrespective of these new emerging areas, the traditional work areas remain at the core of this career. Here’s a quick overview of each:
Taxing
Tax management forms the primary area of function. This includes suggesting investments and working out means to reduce taxes (both direct as well as indirect taxes). Tax managers have to work in accordance with various national and international tax rules, subject to clients’ business or requirements. CAs also help individuals calculate their taxes and file returns.
Auditing
Auditing includes the evaluation and assessment of financial records of companies. This is one of the most important aspects of a CA’s job since according to the Company Act only professional CAs are authorised to conduct audits. Auditing can be internal or external. An auditor reviews the accounts as presented by the concerned authorities of the respective company in relation to the expenses and profit earned. Following this, they present their report on the accuracy of the same. Usually all companies conduct internal audits before inviting external authorities. Internal auditors do a thorough review of all the records and point out loop holes or inaccuracies that are fixed before external auditors are called upon.
Financial accounting
Maintaining accurate financial records is a major concern for big and small companies alike. CAs extend their service in terms managing these accounts. “Financial accounting is basically preparing the financial statements for a company based on the expenditures and income. This gives the management as well as stakeholders a clear picture of where the firm stands,” elaborates Vora.
Remuneration
The remuneration for a private consultant may be subject to the service offered and the city. “With a good, reputed company, a fresher can get up to six lakhs, per annum” says Kapoor. With experience the amount increases to as much as 30- 40 lakhs plus per annum.
Course
CA programme is of two years apart from the training period. It has three sections, Common Proficiency Test (CPT) that was earlier known as Professional Education exam PE1, Professional Competency Examination (PCE) and Final examination. The registration for CPT and PCE is open throughout the year. A student may register at any time during the year. However, as the examinations will be held twice a year in May and November, it is necessary that a student must register at least ten months before the examinations. After passing the Professional Competency Examination (PCE) candidates are eligible for registration as articled clerks/audit clerks for practical training. Computer Training Programme, ie 100 hours Information Technology is compulsory for the candidates who wish to register themselves as auditor clerk. Students can undergo this programme while pursuing CPT or PCE.
Articled clerk is a trainee attached to a practicing chartered accountant under a Deed of Articles for the duration three years. During this period the articled clerk will also need to continue studies for the CA exam. An audit clerk is a person who has served as a salaried employee for a minimum period of one year under a practicing chartered accountant. During the training period, candidates would be required to work in different areas learning the basics of auditing and taxation . This training enables them to learn the technical details of the job as well as to get an idea of the working environment of the profession.
Exam Pattern
CPT Examination is objective type test comprising of 4 subjects which are: -
Fundamentals of Accounting – 60 marks,
Mercantile Laws – 40 marks,
General Economics – 50 marks
Quantitative Aptitude – 50 marks.
The CPT Examination is held twice a year on a Sunday in the months of June and December every year. A student to be eligible to appear in the CPT Examination must have been registered for the CPT Course with Board of Studies of the Institute on or before 1st April in the case of June Examination and on or before 1st October in the case of December Examination and must have passed 12th Class Examination or already appeared in 12th Class Examination of a recognized Board.
Candidates have option to opt for English or Hindi language as medium, for the purpose of question papers booklet while answer sheets are in English Language only. Each student who appears in the CPT Examination is issued a Result Card within two weeks of the declaration of results. No Pass Certificate as such is issued to CPT pass students. A candidate securing 70% and above marks is declared to have passed with Distinction. A candidate securing a minimum of 60% marks in order of merit up to 10th Rank are included in the Merit List and Merit Certificate to such candidates are also issued.
Eligibility
Should have passed or already appeared in 12th class recognized examination. (Students who are appearing in 12th class examination in March/April 2010 are also eligible to appear in CPT to be held in June 2010)
Steps to be Followed
(i) Enrol with the Institute for Common Proficiency Test after passing Class 10 examination conducted by an examining body constituted by law in India or an examination recognized by the Central Government as equivalent thereto.
(ii) Appear CPT examination after appearing in the Senior Secondary Examination (10+2examination) conducted by an examining body constituted by law in India or an examination recognized by the Central Government as equivalent thereto and after completion of specified period (i.e. 60 days) from the date of registration for CPT prior to the first day of the month in which examination to be held with the Board of Studies.
Common Proficiency Test (CPT): Although students can register after class 10, but he/she can appear for the exam only after appearing for 10+2. It comprises four subjects: Accounting, Mercantile Laws, General Economics and Quantitative Aptitude. It is an objective-type paper with negative marketing. ICAI provides the required study material.
Application forms can either be downloaded from the ICAI website www.icai.org or can be acquired from one of its offices.
(iii) Join PCC, articled training and register for 100 hours ITT after passing CPT and 10+2 examination.
(iv) Undergo 100 hours ITT on completion of three months of articled training (100 hours ITT is a 20 days programme @ five hours per day; the training will be treated as part of the practical training).
(v) Appear in Professional Competence Examination (PCE) If
====>worked for not less than fifteen months as an articled assistant or equivalent period as an audit assistant or partly as an articled assistant and partly as an audit assistant, three months prior to the first day of the month in which examination is held; and
====>completed 100 hours ITT.
Eight months of audit training is treated as equivalent to six months of articled training. Any fractional period of audit training less than eight months is not counted for this purpose.
(vi) Join CA Final course:
=>After passing PCE register for Final course with the Board of Studies;
=>Collect Study Materials of the Final Course and prepare for Final Examination;
=>May undergo General Management and Communication Skills Course while undergoing Final course; and
=>Complete articled training of 3½ years.
(vii) Appear in final examination on completion of the practical training on or before the last day of the month preceding the month in which the examination is held.
The final examination comprises two groups of four papers each. Group I includes Financial Reporting, Strategic Financial Management, Advanced Auditing and Professional Ethics and Corporate and Allied Laws. Group II comprises Advanced Management Accounting, Information Systems Control and Audit, Direct Tax Laws and Indirect Tax Laws.
(viii) Pass Final examination and complete GMCS;
(ix) Enrol for membership.
Future perfect
The rapid growth of the money markets is leading to a growing demand for CAs. Irrespective of whether a company is big or small, or even individuals in the service sector, everyone seek the assistance of CA when it comes to managing money matters. As Sanghvi says, “The laws in India are very complicated and thus, difficult to understand. Additionally, they keep changing every year. Keeping track of the constant changes is a difficult task for even literate people, and in India the literacy level is still low. Therefore, people seek the service of a CA.”
Moreover, when it comes to auditing, as stated earlier, the Company Act authorizes only certified CAs to conduct audits for credential certifications, as a result of which, practically all companies require the service of CAs.
While the field’s future certainly seems promising, Vora warns, “It all depends on your performance. If you are good at your work, there is no looking back. But if you are unable to cope, then things can certainly difficult.”
Weighing the pros and cons
On the brighter side, chartered accountancy is a very respectable job and pays well. CAs provide a wide gamut of services. Thus the profession keeps you updated with the happenings in various fields. Nevertheless, the work hours can indeed be a disappointment. According to Kapoor, “Another aspect that can be looked at as a downside is the fact that the CA course gives equal weightage to all aspects like taxing, accounting, etc unlike MBA courses, wherein you have specialisations. Therefore, if a CA wishes to specialise in any particular field it’s completely up to him/ her to do it.”
Kapoor points out that in this profession there is considerable waste of intellect. He insists that there are many aspects of the work that are ‘clerical’ in nature. “For example, tasks like mere calculations,” he says, “do not require a CA”.
Getting started
It is always advisable to start off with a good company or a practising CA. CAs can be employed with a government office or a private firm, or choose to get into a private consultancy. Sanghvi explains, “If you are planning a consultancy firm, it could be difficult till you establish yourself and get clients. In the meanwhile pursuing a part-time job is a good idea.” But once you find your place in the industry, there is no looking back.
For more details, visit www.icai.org
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