Skip to main content

Can we Check out of Legislative sphere without risking our to derecognition.

Accountants today across the globe are what the legislation want them to be. In our attempt to our emphasise our role as business manager/process manager/financial engineers do we have an option to exit out of legislative zones.

Take for instance if ICAI decides tommorrow to derecognise itself from Statutory financial audit and taxation role what is left is a simple Post graduate qualification in Accounting with its members. Then the question arises do accounting need accountants in business. In todays IT world a physical accounting qualification is almost not necessary ofcourse there will be a lot of back up exercise but they are one time with few manning (rather miniscule) which means Accounting perse works on legislative sanctity and compliance requirement as somebody the other day said if there were not 2 million pages of Accounting standards probably its conformance certification would not have been a must.

Well a question may be asked what if the stakeholders other than legislators want accounting the answer is then tailor amde accounting and not compliance accounting. Auditing being a corollary to existing of accounting would not have survived in this manner. It is a bid question if sec 209 drives ICAI/ICWAI and keeps them kicking the answer is to a large extent true for both the institute.

At this point of time if one suddenly visualises the potential of members of ICWAI/ICAI as more than just a legislative accountant then watch out the profile of both the institute and appreciate who has to re-jig. Members of ICWAI(98%)in the industry and ICAI(35%)in the industry. But this is a partial story practising ICAI members in large numbers are in accounting zone specially in SME segment.

If ICWAI suddenly thinks that we have to focus ourself as Business managers and not simple accountants fine they are free to think so but how come such a thought blocks progress in Legislative sphere to such an extent that ICWAI has to exit from Legislative support is Big question to be pondered upon by the stake holders (40000+200000+industry+GOI) and not just the council or a part of it. A plebisite ofcourse is a must.

Are we prepared?


Popular posts from this blog

Throughput Accounting

Throughput accounting (TA) is an alternative to cost accounting proposed by Eliyahu M. Goldratt. It is not based on Standard Costing or Activity Based Costing (ABC). Throughput Accounting is not costing and it does not allocate costs to products and services. It can be viewed as business intelligence for profit maximization. Conceptually throughput accounting seeks to increase the velocity at which products move through an organization by eliminiating bottlenecks within the organization.

Cost (or Management) accounting is an organization's internal method used to measure efficiency. Since no one outside the organization uses such internal accounts for investment or other decisions, any methods that an organization finds helpful can be used.

Throughput accounting improves profit performance with better management decisions by using measurements that more closely reflect the effect of decisions on three critical monetary variables (throughput, inventory, and operating expense — defin…

Learning Curve Theory

Learning Curve Theory is concerned with the idea that when a new job, process or activity commences for the first time it is likely that the workforce involved will not achieve maximum efficiency immediately. Repetition of the task is likely to make the people more confident and knowledgeable and will eventually result in a more efficient and rapid operation. Eventually the learning process will stop after continually repeating the job. As a consequence the time to complete a task will initially decline and then stabilise once efficient working is achieved. The cumulative average time per unit is assumed to decrease by a constant percentage every time that output doubles. Cumulative average time refers to the average time per unit for all units produced so far, from and including the first one made.

Major areas within management accounting where learning curve theory is likely to have consequences and suggest potential limitations of this theory.

Areas of consequence:
A Standard Costing

Resistence to Change - Approaches of Kotter and Schlesinger

The Six (6) Change Approaches of Kotter and Schlesinger is a model to prevent, decrease or minimize resistance to change in organizations.
According to Kotter and Schlesinger (1979), there are four reasons that certain people are resisting change: Parochial self-interest (some people are concerned with the implication of the change for themselves ad how it may effect their own interests, rather than considering the effects for the success of the business)Misunderstanding(communication problems; inadequate information)Low tolerance to change (certain people are very keen on security and stability in their work)Different assessments of the situation (some employees may disagree on the reasons for the change and on the advantages and disadvantages of the change process) Kotter and Schlesinger set out the following six (6) change approaches to deal with this resistance to change: Education and Communication - Where there is a lack…