India will soon have professional degree-granting colleges for accountants along the lines of IITs and IIMs. The Modi government is bringing an amendment to the Chartered Accountants Act in order to end the monopoly of regulatory bodies like ICAI, ICWAI, and ICSI. The Bill — to amend the Chartered Accountants Act 1949, the Cost and Work Accountant Act 1959, and the Companies Secretary Act 1980 — was introduced by MoS (Corporate Affairs) Rao Inderjit Singh.
This bill will give the government greater control over the regulation of these professions and open up the sector which has been tightly controlled by private lobbies so far. So far, three institutes – Institute of Chartered Accountants of India (ICAI), Institute of Cost and Works Accountants of India (ICWAI) and Institute of Company Secretaries of India (ICSI) – manage and lead accounting professions in India.
“One institute – ICAI – has a monopoly over the auditing, assurance, attestation and certification functions. Now, if these functions are opened up to the ICWAI and ICSI, it could result in healthy competition. It would complement the overall growth of the finance and accounting profession,” said a senior accounting professional.
“Nurturing the other two institutes for these activities is also building competition. Given that these new institutes will be along the lines of IITs and IIMs, which are basically Centres of Excellence (CoEs), it will surely take a lot of time for these institutes to offer the same quality, attain the size and provide competition. So, rather than open a new institute, which is a long-term affair, it would be better to nurture the other two institutes,” he added.
India has very few accounting firms of repute. The accounting sector in India is dominated by the Big Four (Deloitte, PricewaterhouseCoopers (PwC), KPMG, and Ernst & Young)- all of which are United Kingdom based companies.
Given the kind of corporate fraud the country has witnessed in the last decade, one can argue that the accounting sector dominated by MNCs has failed the country. The accounts of almost all of the companies that failed in the last decade were approved by auditing firms and they found their balance sheets healthy.
The accounts enjoy great power without much responsibility as they are not held responsible if the banks or the people lose money by investing in a company.
With the new bill, the accounting profession will witness the entry of fresh talent from non-metro cities and villages. So far, the accounting profession has been dominated by graduates from metropolitan cities because the students in villages do not even have a fair idea of how to enter the accounting profession. Now a national level entrance exam will be held for entry into the Indian Institute of Accounting, just like the ones for IIT, IIM, and AIIMS.
Passouts from class 12th will sit for exams and enter the accounting profession without going through the complex and punishing process of articleship and training which is accessible only to people with right connections or good financial background.
Moreover, the perpetual shortage of accountants in the country will also be solved because the demand and supply will be decided by the market, not by somebody managed by a few private individuals. With the opening of the Indian Institute of Accounting (IIA), India may have an accounting firm of repute very soon just like the ones we have in the Information Technology sector.
IIA decision is not bad if i look from Indian perspective.But many concerns still loom large.IIA’s are expected to have same powers as CA’s.I fear of another Monopoly or Duopoly being created in the near Future.
The fact that CMA’s and CS’s must have been given a chance to prove their mettle and usher competition in the Accounting profession which is dominated by CA’s .Again the dominance is brought about by whom?Govt itself.
Even now they did not allow other 2 bodies the right of Auditing Accounts and Others .
Strange issues in the country.
Hope IIA’s solve the issue.
But better opportunities were always there ready at disposal.
Lack of Fighting Spirit and representation specially from the CMA Institute to include them into Accountants has led to this disaster.
Atleast for 2 decades, ICWAI (CMA) has been submitting representations to the government during annual budget excercise every year to include CMAs under Accountant definition. But, so far, due to bad politics and lobbying by CA institute the issue remains on paper only. There was a draconian clause earlier that the government must take advise from CA institute on all matters of accounting and auditing profession in India. It is like removing article 370!
IIA is a bullshit idea. With one move, NDA will lose the support of all the CAs in India. In the no other country do accountants or other professionals have multiple bodies. It’s ridiculous; these IIAs will not have an ounce of quality, as a result companies will end up hiring CAs only. I am a huge supporter and fan of Mr. Modi but this is a dangerous move. He’s playing with fire here. I recommend the Govt to immediately withdraw this malicious bill and recommendations.
Ur reaction is showing nda is on right path weeding out asshole like u
Not more than one lac CA and associates in the country and around hundred in a medium city.
NDA dam care.
Amendments should be appreciated, not threatened
Hey MF Yuvi, just because I don’t agree with you does not mean that I am anti-BJP. In fact I support BJP is the most dangerous state of all, West Bengal. Assholes like you are only helping Congress by unnecessarily alienating BJP’s voter base. Majority of the CAs are BJP supporters. But moves like this will surely antagonise them. Yuvi, just because you didn’t pass CA does not make it bad. Stop being a whore.
Dr. Anish, will you agree to Govt making multiple bodies competing with MCI? Think before commenting.
IIA is a good movement.It will develop accounting profession In India and world. It’s admission and teaching (off line and online)procedure should be properly accessible to all easily. Practical training should be allowed before/during or after theoretical part.
I strongly oppose the IIA policy of Mody Government. As this is one of the rare field where no reservation policy is implemented. Only talented people get the degree.
IIA is a good movement.It will develop accounting profession In India and world. It’s admission and teaching (off line and online)procedure should be properly accessible to all easily. Practical training should be allowed before/during or after theoretical part.
IIA . Teachers will be a charted Accountant ?
obviously , do they have choice ? ;)
All the present Institutions are capable of handling the auditing work though they are specialising in specific area. It is better to open up CAs opportunities to other two Institutions. Allow all three institutions to form jointly firms/companies to handle all types of audit work whether statutory audit, cost / management or secretarial.
The decision is good to the future of the country and it is for the progress of the country
The decision of the Government is it is moving in the right direction ending the monopoly. CAs and other CS and ICWAs have failed to deduct scams in banks,frauds .Now with these move this will end the highandedness of these professional who were controlling the economy.
do you really think all IIA passouts will be honest and never bend nee to the shitty politics?
instead of this amendment bill , they must introspect first and point finger at others
CS and CWA were not involved, rather are not doing auditing to detect scams and frauds. So far, CA institute has been auditing banks and corporates where scams and frauds have surfaced.
If corporate frauds are the main concern behind this change, I think any regulatory change should primarily address the flllowingv2 matters: (a) board integrity and disciplinary measures against BOD and (b) measures to substantively protect independence of auditors. The rest of the matters will automatically be taken care of by audit procedures.
In addition, a new body should he formed to address investigation as a profession (as audit procedures, by nature, are not designed or meant to detect frauds).
Apart from the above any other measures will only retain the same problem or lapses in one or other forms. It will not solve the primary issue.
Atleast for 2 decades, ICWAI (CMA) has been submitting representations to the government during annual budget excercise every year to include CMAs under Accountant definition. But, so far, due to bad politics and lobbying by CA institute the issue remains on paper only. There was a draconian clause earlier that the government must take advise from CA institute on all matters of accounting and auditing profession in India. It is like removing article 370!
That is why in the current amendment, more importance is given to strengthen the disciplinary mechanism, independence, & conflict of interest are addressed thereby ending CA monopoly in this area.
How will introduction of IIA help CA’s ?
It will be a matter of giving degree in Accountancy profession with the introduction of IIA. The Institute of Chartered Accountants of India literally grooms a person by practical training through Articles hip and one has to struggle hard to get CA degree. No doubt of late Institute started developing monopoly . The cultural issues developed by some firms with shortcut methods and more reliance on technology against traditional methods have resulted in frauds and mismanagement of accounting. Even after more than 70 years experience if ICAI faces problems I don’t know what will be the fate of new IIA concept and whatever may be the duration of course will it be possible to give practical training or it will be theoretical training only. As Mr. Palkhiwalla rightly said “Not much harm is done at University level provided you start learning thereafter”
Well these are my personal views .
World over (except India) only CPA is recognized. There are only 4 papers and it takes minimum 18 months to complete. But in India it takes endless years to complete CA/CMA/CS. All this has to change. No point in torturing students to achieve quality.