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The word Chartered hot debate in India

The word "Chartered" we debate on everytime as in word "Chartered Accountant", I thought of finding the origin of this word. Some interesting facts that I came to know when I searching wikipedia and its related links.

http://www.reference.com/browse/wiki/Charter

A charter is a legally binding document incorporating an organization or institution and specifying its purpose, remit or bylaws. Organisations such as the Institution of Civil Engineers in the UK is chartered to maintain and advance the science and practice of civil engineering in the UK, and by this charter has the right to regulate the business of civil engineering in the UK; this gives rise to a status of a chartered engineer - one who satisfies the requirements of the charter holding organisation.

http://www.reference.com/browse/wiki/Royal_Charter

The BBC operates under a Royal Charter which lasts for a limited period of ten years, after which it is renewed.

Most Royal Charters are now granted to professional institutions and to charities. A Charter is not necessary for them to operate, but one is often sought as a recognition of "pre-eminence, stability and permanence".

http://www.icaew.co.uk/index.cfm?route=1443

The Institute (ICAEW) was established by Royal Charter in 1880. It is now a key influencer on the international stage and the leading UK body of finance professionals offering world class qualifications.

http://www.reference.com/browse/wiki/Professional_body

A professional body or professional organization is an organisation, usually non-profit, that exists to further a particular profession, to protect both the public interest and the interests of professionals. The balance between these two may be a matter of opinion. One the one hand, professional bodies act to protect the public by maintaining and enforcing standards of training and ethics in their profession. On the other hand, they may also act like a cartel or a labor union (trade union) for the members of the profession, though this description is commonly rejected by the body concerned. Membership of a professional body does not necessarily mean that a person possesses qualifications in the subject area, nor that they are legally able to practice their profession - although in some countries and professions, membership of a professional body is required for somebody to legally practice.

Many professional bodies also act as learned societies for the academic disciplines underlying their professions

So where does this word come into in Indian scenario ? We don't have a Royal Charter. Americans don't have Royal Charter so they don't have chartered accountants.

http://www.privy-council.org.uk/output/Page26.asp

Royal Charters, granted by the sovereign on the advice of the Privy Council, have a history dating back to the 13th century. Their original purpose was to create public or private corporations (including towns and cities), and to define their privileges and purpose. Nowadays, though Charters are still occasionally granted to cities, new Charters are normally reserved for bodies that work in the public interest (such as professional institutions and charities) and which can demonstrate pre-eminence, stability and permanence in their particular field.

Many older universities in England, Wales and Northern Ireland are also Chartered bodies.

http://en.wikipedia.org/wiki/List_organisations_in_the_United_Kingdom_with_a_royal_charter

What does word "Chartered" mean in India ? I don't think so anything... since we have borrowed the word from the West ?

When you read websites of Indian counter parts... see how they describe themselves...

ICAI website: A statutory body established under the Chartered Accountants Act, 1949 for the regulation of the profession of chartered accountancy in India. The Institute has achieved recognition as a premier accounting body for its contribution in the fields of education, professional development, maintenance of high accounting, auditing and ethical standards.



What do they mean by words "profession of chartered accountancy in India". English counterpart don't mention that.

 
About us has now changed on ICAI website changed

The Institute of Chartered Accountants of India (ICAI) is a statutory body established under the Chartered Accountants Act, 1949 (Act No. XXXVIII of 1949) for the regulation of the profession of Chartered Accountants in India. During its nearly six decades of existence, ICAI has achieved recognition as a premier accounting body not only in the country but also globally, for its contribution in the fields of education, professional development, maintenance of high accounting, auditing and ethical standards.ICAI now is the second largest accounting body in the whole world.


However see Mission Statement


The Indian Chartered Accountancy profession will be valued trustees of World class Financial competencies, Good Governance and Competencies.



There is only one reference (Sec 24 A) to the word "Chartered Accountancy" in ICAI Act and the Act does not define word "Chartered Accountancy".
 


ICWAI website: A major task was cost control and cost management of the massive development endeavours that the Cost Accountants accomplished with excellence and did a great service to the nation. Consequently, the Institute got statutory recognition with the enactment of The Cost and Works Accountants Act, 1959 (An Act of the Parliament of India giving statutory recognition to the Institute and formation of the profession of Cost Accountants in India having statutory rights, privileges and duties).

ICSI website: The Institute of Company Secretaries of India is constituted under the Company Secretaries Act, 1980 (Act No. 56 of 1980) to develop and regulate the profession of Company Secretaries in India. It was in 1960 that the Company Law Board started a course in company secretaryship leading to the award of Government Diploma in company Secretaryship. As the number of students taking up the company secretary ship course grew. The Government promoted on 4th October, 1968. The Institute of Company Secretaries of India under Section 25 of the companies Act, 1956 for taking over from the Government the conduct of company Secretaryship examination. The Institute of company Secretaries of India has since been converted into a statutory body w.e.f. 1.1.1981 under the Company Secretaries Act, 1980.

What do you feel, our Indian counterpart should be known..... some word to start or end with Act. ?

The true meaning of professional body is one when reading the ICAEW website, how it manages the profession and how it protects their user group. Click on The Institute


  • Complaints: Find out how we handle complaints about accountants.
  • Governance and structure: Information about what the Institute does and how it is organised.
  • Policy development: Information about the Institute's policy making processes.
  • Protecting the public : Find out about the Institute's regulatory and disciplinary activities.
  • Job vacancies: View the latest vacancies and find out how to apply.

PS: Surprising there is only one Chartered Body in India: See the link and find out


I visited GOI website
http://goidirectory.nic.in/specinst.htm

to read about specialised institutes in India - what naming convention they have. I was surprised to find that the word "Chartered" is for only one Institute - ICAI.

The most common naming convention used by Institutes are "National Institute of.... or Indian Institute of...." . Why has this word being used only for one Institute and no one else. So name of the Institute with the word "Chartered" is misleading in Indian context.

The word Chartered is used in UK context and has a meaning when you say a Chartered body

Read http://www.reference.com/browse/wiki/Royal_Charter

As you read the link above, "A Royal Charter is a charter given by a monarch to legitimize an incorporated body, such as a city, company, university or such."

India is a republic and there is no such thing as royal charter. So the name Institute of Chartered Accountants of India is misleading as the word "Chartered" has no meaning.

We have been complaining about word "Chartered" to be used for Institute.... but this does not seem to relevant.

If there is only one Insitute in India with " Chartered", then we have to request a change in name as this is misleading.

Is Mr. Chindambaram listening ?

Regards,

Santosh Puthran


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Comments

Santosh Puthran said…
I have received following comments when I posted on different forums.

On 07/12/06, ROHIT VORA wrote:

Hi,

Do you think that by simply a Change in the name from Cost and works
to Cost And Managent could change the life of the Individual Cost
Accountant?

If all Cost Accountants at Job or consultancy delivers to and for
management than by result only we all can recognise as Management
Accountant or Consultant

Rohit Vora
Santosh Puthran said…
Santosh Puthran Replies:

Hello Rohit,

What you say is true... Change of name does do anything to a Cost Accountant unless and until it adds value to his career.

That is what the institute has to work towards. Sometime back I had sent an email how ACCA supports its passed finalist and members in their career progression and making the mark in the industry.

http://www.accaglobal.com/affiliates/support/

ACCA become a Chartered body in in 1984 even though it was formed in 1904. Same is the case with CIMA. They have earned a status of "Chartered body" after such long years of existence.

In India, the scenario is different. The bodies are formed by the Act of Parliament. To me or for everyone, these bodies are an extension of govt. To get the accounts audited, you have to get it done by a member of ICAI. Or Cost Audit should only be performed by ICWAI. As the time has passed, Company Secretary should be a member of ICSI. How can you expect the standards of these institute to improve, when the user has to go to these bodies. There should be a regulatory body to monitor these Institutes and encourage new accounting institutes to come up and meet the standard.

You are right to say, name change will not help. But unless and until we have no. of institutes, the plight of public and members will continue to remain what it is today. Over the period of time, overseas institutes will build up presence in India and then demand recognition for practise. See CIMA how it is encouraging professionals to do their course. And now companies have taken a notice to hire CIMA. You will notice ACCA is offering country specific variants for their courses and it would build up membership base everywhere. At the same time , they are creating opportunities for their members and students in the industry.

The point I raised for the word "Chartered" in ICAI is to know how it is relevant in Indian context ? If the word "Management" misleads the public, then so does "Chartered".

Read ICAI website:

1949


The Chartered Accountants Act, 1949 was passed on 1st May. The term Chartered Accountant came to be used in place of Indian Registered Accountants.




Chartered Accountants Act was brought into effect on 1st July. The Institute of Chartered Accountants of India is born.


Why does no other institute has this fancy word ? Does "Chartered" word add some type of goodwill to accountant. Registered Accountant is an appropriate name for an accountant who is doing financial accounting.

All the bodies have to raise their standards, their internal workings, equal focus to members in employment and practice... Our accounting bodies primary focus is getting statutory audits/certification for members in practice. Unless we until there is a change in how the accounting bodies are recognised.... we continue to talk about this subject for times to come...

Regards,

Santosh Puthran
Santosh Puthran said…
"CMA.R.Veeraraghavan"
wrote:
>
> --- yOU SAID IT.BUT WHO WILL LISTEN IN THIS WORLD OF DICTATED
> DEMOCRACY.THOUGH WE ABOLISHED PRIVY PURSE LONG BACK(NO THE BRITISH
- Hide quoted text -
THEMSELF DID IT)WE STILL FEEL
> OBLIGED TO RECOGNISE THE CHARTER OF A MONARCH THOUGH THE MONARCH OF
> ENGLAND MAY YET NOT SINCE IT REQUIRES A RENEWAL FEE AND CONTINUITY OF
> SANCTITY(IT IS NOT SANCTIFIED BY THE AUTHORITY FOR 60 YEARS).I THINK
> A RTI TO MCA FOR THE USE OF THE WORD CHARTERED AND ITS RELEVANCE IN
> INDIAN CONTEXT,AND QUESTION IN THE PARLIAMENT WOULD HAVE AN IMPACT.
> ANY TAKERS!
Santosh Puthran said…
CMA.R.Veeraraghavan
to Santosh

--- Hi
To raise a question in parliament is not much difficult as MPs are
thirsty for a question A Starred question would have an impact.
As regards RTI anybody can file however it is better that a person in
government service do not indulge in this and this is an effective
mechanism today.
Santosh Puthran said…
CMA.R.Veeraraghavan
to Santosh
More options 03:36 (4 hours ago)
On the basis of their reply we should initiate suitable legal action.
The question could be:
1.Is it true that MCA administers the ICAI and ICWAI institutes
through an act of parliament?
2.If so is it also true that these acts were amended as late as 2006?
3.If so did the ministry ruminate on the nomenclature to be adduced
to both these acts?
4.Were there any recommendation by an empowerwed committee to change
the name of the institute of ICWAI?
5.Was it further deliberated?if so the reason for retaining the
Orginal name of the institute?
6.Is the recommendation shelved or kept in abeyance?If so its status
as on date?
7.What is the orginal Import of the word Chartered in the ICAI act
and Works in the ICWAI act?
8.If these words do not reflect the functionalities of the
profession,the reasons for retaining the same in the year 2006 when
new act was passed?
9.If the word Chartered has decorative import why then the same was
not extended to the similar act governing cost accounting profession?
Like Chartered Cost accountant.
10.If the word Chartered had relevance in the pre-independent India
what then was the reason for retaining the same even today?
11 If the word chartered had a definitive meaning or sanctity in the
British Raj and has lost its relevance today why then the same is not
discarded from the nomencalture as did many words and concepts like
the "privy purse"?
12.the Chartered accountant reflect their functionality as financial
accountant?or do the word Cost and works accountant reflect their
functionality today as a management accountant?
13.Do the ministry feel that the customers and stake holder are kept
in the dark as to the orginality of the functions of the membersof
these institute?
14.Corrective measures if any in the mind of the MCA and the time
frame required to do the same?
ravi said…
I think Santosh the first step could be to file an RTI application with the MCA-Information officer and set the ball rolling.
Any citizen of this country can file an RTI if he proves he is the stakeholder of an issue.In this case since the name is in question as a consumer of the statute any citizen can claim that the Name is misleading the society to exclude a similar profession(ICWAI)from expositing its talent.Also this amouts to government creating a Monopoly condition within the statute by having a partisan approach towards chartering a category of accountants in preference to the other.This also resulted unequal distribution of work area statutorily enabled.
ICWAI has generated accountants with specialisation in Cost and management accounting in addition to financial accounts through a much easier route that allows flexibility to attempt exams while at work to earn bread at the same time not compromising standards in anyway through enforcement of 3 year relevant experience criteria,in contrast the Articleship limits the capability of the person to enter the course if employed at a better place and there is no option under ICAI regulation.Worldover the trend is to give alternatives.
The breed of accountants thus coming out of ICAI cannot be economic class neutral in this society.

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