CA. Prafulla Chhajed / ICAI-Towards Greater Heights

A crusader of inclusive growth in the accountancy profession, CA. Prafulla Chhajed, President, Institute of Chartered Accountants of India (ICAI), has a commendable professional acumen and standing. At a recent conference ‘GST Gyan Manthan’, at Sri Balaji University, Pune (SBUP), organised by Pimpri-Chinchwad Branch of Western India Regional Council (WIRC) of ICAI, he presented views of Indian accountancy profession and defined the institute’s vision and mission to pursue the agenda of inclusive growth and take the institute and accountancy profession of India to greater heights. Passionate about both national and international image of the accountancy profession, he further talked about their straightforward, simple and profound approach to the affairs of the profession. Corporate Citizen brings the excerpts of his riveting keynote address

We are number one in the world

You will be happy to note that when we talk about our profession, we, the Institute of Chartered accountants of India (ICAI) are now close to three lakh members and around 7.5 lakh students. all together if you take us, we are now over a million in numbers. We have now 164 branches in India, 34 international chapters, and are members of various international bodies. Time and again we are taking all the necessary steps for building up the Chartered accountant (Ca) profession. as far as numbers are concerned, we always say that we are number two in the world in terms of numbers. But if you take the absolute, we are the number one in the world because in the Usa, they have got statewise Certified Public accountant s(CPAS) and over and above that they got american Institute of Certified Public accountants (AICPA). so, because of all these state CPAS coming together, is the reason why they are number one. as far as absolute number we are number one in the world.

Now as I represent ICAI of various global forums and I can assure you the quality of our professionals and services that we render in India, be it on ethical or any other side, they are second to none. I am really proud that my institute, which for the last 70 years is doing a wonderful job. Till now we are the sole regulators of the accountancy profession.

Challenges and opportunities

There are certain challenges and there are many opportunities as far as the profession of Ca is concerned. What could be the challenges? Because of, a lot of expectations from various stakeholders, or the society at large, or the government every day something is going wrong on the business front and next day the Ca’s name comes up. That is worrisome because we are all diligently working together. People don’t understand the role of the Chartered accountant, they expect that being a Ca, once he/she puts their signature, it means everything is right. We are not a forensic auditor, but the society at large, they don’t understand the exact limitations, in the manner which we function. Therefore as a profession, it is a challenge before us also.

Take one extra effort

Various sources, regulators and authorities, I feel are expecting too much from us, just because it is signed by a Ca which is not the CAse. But, India is a big country and there are so many other regulators police is a state subject, which is not controlled by the Union Government. so, that kinds of challenges are there. Last seventy years our journey has been of excellence, ethics and everything, but still with changing dynamics, when you are putting your signature, please be more careful. Take one extra effort to check whatever you have signed is absolutely correct. as today’s world has RTI, as today’s world is open to media and everything is coming on the social media, my request to all of you will be that whatever you are doing, do it in the most appropriate manner. If you need somebody’s help, take it. We are time and again representing before the government and other authorities.

Our quality has to be of world-class

secondly, India is going global in terms of economy we are not talking about how fast it is growing or not growing but the economic conditions of the country is now marching towards an open economy in terms of everything. We as a profession would like to protect ourselves from the foreign professionals coming and practising in India. We as a profession would like to have a monopoly of what is happening, but taking the country as a whole, it is signatory to various trade and other agreements with various countries. In some of the areas like opening up the accountancy sector or opening up auditing sector, how long we will be able to protect ourselves against these challenges, is also a challenge. But, till now I can assure you that due to the best of our abilities, those things are not happening. But what is important is again the quality of the profession. Because, if foreign companies are coming and when they want to get their accounts audited, and they want certain certification, our quality has to be of worldclass level. otherwise, even though there are opportunities due to opening up of the economy, these opportunities will not come to our CAs.

Have to match ourselves to international standards

"I can assure you the quality of our professionals and services that we render in India, be it on ethical or any other side, they are second to none"

Another fallout will be that we may be no longer be able to prescribe our own accounting standards and auditing standards. We have to sync our technical material, be it accounting and auditing standards, including the ethical standards, with what is happening globally. at the global level, we have the International Federation of accountants (IFAC), of which India is the founding member. Now IFAC is responsible for around 178 jurisdictions from around 130 countries. so, around 130 countries are the members of the IFAC. The IFAC prescribes that there should be one uniform accounting practised across the globe. Whatever format in which we are practising, in which the businesses are working, we have to march ahead and match ourselves to international accounting and auditing standards. This journey will not be smooth, because in India if you see the profile of a Ca, we got about fifty per cent members practising in industry, and out of those around 70–80 per cent are into proprietorship kind of thing. and it becomes difficult for a proprietor to have knowledge of everything. Being a link between the trade and government for that particular compliance, you have to understand whatever new laws that are coming.

Building our capacities

As a Ca, you might be doing your work properly but certain auditing standards require that there should be documentation. again, as an institute, there is a committee for capacity building of Ca firms and for that we are preparing audit tools, similar to the big firms that have their own digital formats, which takes care of documentation requirements to a larger extent. so, for enabling our members, we are trying under that particular committee.

Again, in the sMP format that we are practising, there are certain challenges. Whenever any council member or president will come they will tell you that no longer you should be proprietor, you should become a partner. It is not that easy that in one day you will become a partner with somebody. It takes longer time to understand that person professionally. so, there are some networking guidelines, but those guidelines are not that effective, and therefore, there are no large networks available within our profession. To help those members to have better networking, there is an agenda which is coming before the council and I am hopeful in few months-time that agenda will also get cleared and it will be a step towards coming together and building our capacities in giving better service in terms of acquiring better knowledge, as far as the profession is concerned.

Technology impact

The second most important thing is Information Technology ten years ago we were using mobilephones and calling rates were Rs 16 per minute and we were paying for incoming calls also. Today, everybody is using smartphones and technology is available to us at almost zero cost. When we would do articles, we would have ledgers and manual entries, and Trial balance tally was a big thing. Today with Tally and other softwares available, you don’t have to do all these things. In the near future, technology is going to impact our profession.

As you are aware, the government is also talking about the pre-filled income tax returns so what we as a Ca will do? We are helping our clients in filling up those income tax returns and now Government of India is going to give them on their email ID, the pre-filled income tax return. Then where is a Ca’s services required? In times to come, with things like GST, with everything online, the government will start giving you all the statements. There could be some software to take care of GST. so, technology impact is going to come and in the next 4-5 years, how we work is going to change. at the institute we are creating that kind of capacity and have started with workshops and certificate courses on block chain technology, fintech and so on.

"The beauty of our profession is that at every point of time there are around ten thousand people who are working selflessly for the profession and I think if you want to continue this journey, we must support our branches"

Expectations are increasing

(L-R) - CA. Santosh Sancheti, CA. Prafulla Chhajed,
CA. Chandrashekhar Chitale, and CA. Pankaj Patni

Of late, the new CAs that are coming in, most of them want jobs in the industry. Typically, I and you do articleship in different funds, we didn’t have uniform college, therefore, that learning process was also a little bit different. somebody will have tax major in their firm, those articleship will get more exposure in taxation. somebody will have bank audits, those articleship will get that particular exposure. But, once they clear the final Ca examination and when they appear for any corporate interview or job in the market, that person is not interested where he or she has done articles, what kind of experience or exposure they have. They say that you are Ca and I want to recruit you and definitely we want that few things that are market-ready. This is the challenge during the campus placement, because the expectations are increasing. Now to help these new CAs, we are creating this eLearning portal, which is already working and there are few videos uploaded. so in times to come, probably we are heading where technology is there.

For the first time again, for those who have cleared the last Ca examination and are the rank holders, for the entire batch we have given them a 24 days special training, a residential programme, at Manipal academy of higher education (Mahe). eighty per cent of fees was bored by ICAI and those who could not afford, 100 per cent fee was waived. so we are moving into that particular direction. every 6–8 months we got newly qualified CAs passing and it is not possible for ICAI to give them capacities at one go, therefore, we are also moving towards this virtual learning and virtual education for newly qualified CAs.

When we are talking about GST and related things, many times we face practical problems in terms of uploading of returns, GSTR-1, GSTR-9, returns not tallying and many such things. In a recent meeting with honourable Finance Minister, wherein they had invited five sets of people and ICAI was one of them, we talked about the problems we face. You will wonder why ICAI has not done anything on social media. The reason is, we are formed under the Act of Parliament, so we have to maintain that kind of dignity, we have to maintain that kind of maturity. I cannot issue statements against the finance minister or ministry of corporate affairs.

Dreams of the 7.5 lakh students

We owe everything to these students, because they have got lot of dreams. Again, 70 to 90 per cent students, their parents are not CAs. It is the love and respect that we give to the society, which is why today students from middleclass families are choosing to be a chartered accountant. Our entire focus is on the members and the students. We give thousands of scholarships for our future chartered accountants. We also have the challenge to make our profession a future ready profession. We have to have a framework which will be valid five to ten years down the line.

"We are a country of 130 crore people, we CAs are only 3 lakh, out of that only 50 per cent are practising. So, effectively there are hardly 60 to 70 thousand practising as a unit"

Start thinking collectively

How many of you have used the UDIN this is one game-changer that ICAI has bought. Now, nobody can issue a fake certificate and now I see that everybody is using it and everybody is happy. We have generated more than 75 lakh number of UDIN till now. We are a country of 130 crore people, we CAs are only 3 lakh, out of that only 50 per cent are practising. So, effectively there are hardly 60 to 70 thousand practising as a unit, be it a firm or individual. Over 130 crore citizens, so many lakhs of tax audit return, so many lakhs of certificates, now GST we have to start thinking collectively because now lots of expectations are there. Never compromise on the quality and never compromise on the fees that you are charging.

On the global front there are over 40 thousand of our CAs, who are working globally. We are really proud that out of our three lakh members, there are now 74 thousand women CAs. Naturally, when you have put in so much of efforts passing the CA examination, because hardly few people get through the first attempt and some have to go for second or third attempt. You put so much of efforts, you do so much of articleship and sometimes if you migrating abroad, then what happens? Fortunately, we are now working with various global organisations, from IFAC to Confederation of Asian and Pacific Accountants (CAPA). We are trying to get recognition for Indian Chartered Accountancy Course. Recently, we received a certification from UK NARIC, an organisation authority of UK Government that validate course curriculum, accepted in many countries. Now they went through our entire course curriculum. Now even our CA intermediate is like a graduate in the UK and UAE and CA final is like a masters in the UK and UAE. Now Indian CA in Middle- East will be recognised as postgraduate CA.

The beauty of our profession is that at every point of time there are around ten thousand people who are working selflessly for the profession and I think if you want to continue this journey, we must support our branches. We just celebrated our 70 years as the profession, we were formed by the Act of Parliament way back in 1949. This journey was fantastic and thanks to each one of you.