Chapter 21: Chartered Accountancy

Introduction

Chartered Accountancy is one of the traditionally popular courses which opens up challenging career opportunities in business, industry, and trade as well as in the services sector of the national economy. A Chartered Accountant is a professional who has been enrolled as a Member of the Institute of Chartered Accountants of India (ICAI) after undergoing theoretical studies and practical training and passing three successive examinations, viz., Foundation, Intermediate and Final.

The Foundation examination introduced in April 1992 is a pre-professional course – a gateway leading to the prestigious profession. Intermediate and Final examinations constitute the professional course. The Institute of Chartered Accountants of India with its headquarters in New Delhi, was established by the Chartered Accountants Act 1949 for the purpose of regulating the profession of Chartered Accountants. It has five Regional Offices (Calcutta, Chennai, Kanpur, Mumbai, New Delhi) and 81 branches.

As a part of its responsibility to regulate the profession, the Board of Studies, one of the educational wings of the Institute, organizes an educational programme comprising theoretical studies and practical training. The Examination Section of the institute conducts examinations twice a year in the months of May and November. The Institute admits candidates who have passed the final examination as its member and issues “certificates of practice” to those who intend to practice as professionals.

The Courses

The pre-professional Foundation course is of ten-month duration while the duration of the professional course is three years. Theoretical education and practical training are imparted concurrently and are closely linked. There are two types of practical training-as an articled clerk or as an audit clerk. The articled clerks are trainees attached to a practicing Chartered Accountant. The duration of the training is three years. The audit clerks, on the other hand, are basically employees of a practicing Chartered Accountant who provides them this opportunity to enable them to qualify as a chartered accountant while working in his office.

The duration of this training is four years. The articled clerks are entitled to a stipend mainly in the nature of scholarship to meet the cost of education. A person registered as an audit clerk, is also entitled to remuneration. The primary method of imparting theoretical education by the Board is through postal coaching (also called correspondence coaching or distance education method) which is compulsory.

The first step to enter the profession is the registration as a student-articled clerk or a student-audit clerk. The eligibility requirement is that the candidate should not be less than 18 years of age, and (1) should have passed the Foundation Examination, or (2) should have been exempted from passing the Foundation Examination, or (3) should be a graduate. The term “graduate” means a graduate or postgraduate in subjects other than music, dancing, painting, photography, sculpture, architecture, and the like.

Foundation Course

The Foundation course of ten-month duration, introduced in April 1992, seeks to attract students with requisite aptitude for the career of a chartered accountant. It helps them to gain sound and appropriate academic and conceptual base upon which to build their subsequent professional studies and practical training. The subjects of study are (1) Fundamentals of Accounting, (2) Mercantile Law, (3) Mathematics & Statistics, and (4) Economics. The following categories of candidates are eligible for registration for the Foundation course: (1) those who have passed the 10+2 examination, and (2) graduates other than the exempted categories. The exempted categories are: (1) commerce graduate with accountancy, auditing, and mercantile law or commercial law as full papers obtaining a minimum of 50% of the total marks, (2) non-commerce graduates with mathematics as one of the papers and obtaining 60% of the total marks, (3) non-commerce graduates with subjects other than Mathematics and with 55% of the total marks.

The Board of Studies provides course material to the students as part of the postal tuition scheme which is compulsory. The students should comply with the requirements of the postal scheme which involves submission of answers to specified number of test papers and qualifying in them. An alternative to postal test scheme is attending the classes organized by certain educational institutions specially accredited by the Board of Studies. Students who comply with these requirements are permitted to appear for the Foundation Examination.

To pass the Foundation Examination a candidate has to secure a minimum of 40% marks in each of the four papers and 50% marks in aggregate. Candidates have the option to answer questions in Hindi. Only after passing the Foundation Examination can students register themselves as articled/audit clerks for pursuing the professional course. Students should refer to the Foundation Course Prospectus titled Foundation Course - A Gateway to CA Profession, published by the Institute. The articled/audit clerks who have joined the professional course after passing the Foundation Examination can also pursue graduation course concurrently.

Professional Course

Candidates can appear in the Intermediate Examination only if (1) they have completed not less than nine months as articled clerks or as audit clerks and (2) have produced a certificate to the effect that they complied with the requirement of the compulsory postal tuition scheme. After passing the Intermediate Examination, candidate can appear in the Final Examination subject to the fulfilment of practical training requirements. Annexure 1 gives the subjects of the Intermediate and Final Examinations.

As part of the compulsory coaching scheme, the study materials are provided by the Board of Studies to candidates registered for both the Intermediate and Final Examinations. Besides, the Board provides several other services such as preparation of test papers and hints and answers to questions, valuation of answered test papers. For the Intermediate candidates, answering Test Papers is an integral part of education. There are two test schemes – (1) Sunday Test Schemes for candidates registered in a number of specified city jurisdictions; (2) Postal Test Schemes for candidates registered elsewhere. Under the Sunday Test Scheme, students are required to answer and qualify in at least 14 test papers.

The students have the option to answer the questions in Hindi. The Board of Studies issues eligibility certificates only to those students who have complied with these requirements which enable them to sit for the Intermediate examination. However, students attending Oral classes organised by the Institute are exempted from these tests. Students appearing for the Final examination do not need eligibility certificates. They may answer the optional test papers as part of their preparation for the examination. Details regarding the Intermediate and Final examinations are available in Chartered Accountants Regulation, 1988, issued by the Institute. It must be remembered that Chartered Accountancy examination is difficult to pass and the percentage of pass is very small compared to the number of aspirants who appear for the examination. Hard work and commitment only lead to success.

Further Education

The Continuing Professional Education Directorate of the Institute provides professional education for qualified members in three post-qualification courses: (1) Management Accountancy, (2) Corporate Management, and (3) Tax Management. All the three courses have identical schemes – viz., Part I consisting of four papers relevant to the course divided into two groups; and Part II practical training of two years in approved organisation (See Annexure 2)

Admission to Membership

There are two categories of membership: Associates and Fellows. Associate Membership is accorded to candidates who have successfully completed the Final Examination of the Institute. After five years, an associate member is entitled to enrol as a full member. A member has the right to use the distinctive letters “FCA” or “ACA” signifying that he is a Fellow or Associate, respectively. He can also use the designation Chartered Accountant under his name.

Career Opportunities

At present the membership of the Institute is around 80,000 and is likely to reach one lakh mark by the turn of the century. Of these members, about 70% practice the profession and the rest are employed by different organisations. Statutorily, the Chartered Accountants are entrusted with the task of compulsory auditing of the accounts of all companies, banks, stockbrokers, income-tax assesses, borrowers of banks, etc.,

With the liberalisation and globalisation of the Indian economy and the entry of multinationals, the role and scope of work of chartered accountants have increased manifold. Job opportunities are available in various organisations and in the practicing firms of Chartered Accountants. One can set up independent practice also. Apart from the routine auditing work, Chartered Accountants can undertake management consultancy in such areas as management accounting, management information and control system, international finance, information technology and financial services, and the like. Annexure 3 gives a brief account of the varied nature of the specialised activities of Chartered Accountants.

Students interested in entering the profession should acquire a copy of the Institute’s publication Education and Training for Chartered Accountancy.