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Accounting Profession in India

I have never seen such nastiest comments in my life about the accounting profession in India where the readers have commented on the article "IFRS: The magnificent obsession of ICAI by P S Prabhakar"

The writer has makes a valid point,

ICAI draws a lot of consolation from the fact that the Standards Advisory Council -- another organ of the IASB -- has a 1/38th share for India (Sailesh Haribhakti, again not nominated by ICAI) among its members (including 7 representatives from organisations such as World Bank, Basel Committee, IFAC, UNCTAD, International Association of Insurance Supervisors, etc). The EU has 12 members, Africa has 2, Latin America has 3, the United States has 3, even Singapore has 2, while countries like Australia, China, Japan, Korea, Israel & Brazil have one each, like India.

If, in spite of such scant respect shown to the Indian accounting profession and conscious ignoring of India's premier accounting body, the ICAI, if the IASB is able to make ICAI simply dance to the tunes of IFRS (like cheerleaders), then what could be the motive?
However I believe that adopting IFRS by all the countries in the world will bring about standardisation as well as comparability of financial reporting. No local GAAP... less burden on business.




Press Release from MCA, India

Today, in pursuance of the statutory mandate provided under the Companies Act, 1956, the Central Government prescribes accounting standards in consultation with the National Advisory Committee on Accounting Standards (NACAS), also established under the Companies Act, 1956. NACAS, a body of experts including representatives of various regulatory bodies and Government agencies, has been engaged in the exercise of examining Accounting Standards prepared by ICAI for use by Indian corporate entities, since its constitution in 2001. In this exercise, it has adapted the international norms established by the International Financial Reporting Standards issued by the International Accounting Standards Board.
The MCA is moving in right direction where the NACAS with comprehensive mix of people will discuss on Accounting Standards and recommend as necessary. The role of Accounting bodies like ICAI and ICWAI should be primarily to train its professionals / students on accounting and auditing standards. (Judges do not prescribe laws). Globally you will notice that the standards are set by independent bodies FASB, IASB, IRBA, AASB.

Today NACAS is body in India without tooth. MCA should make NACAS proactive or provide more tooth. Similarly all the Audits (apart from External Audits of Companies) areas should be opened to members of ICWAI. More GOI should consider having another financial accounting body similar to ICAI where the training route to obtain the membership should be through employment (similar to ACCA, UK). It should attract more people to Accountancy. A step in this direction will bring competitiveness to the accounting profession in India which is currently dominated by members of ICAI by legal protection.


What about other professions in India where the practising members are more than accountants ? Does the apex bodies regulate the profession in practise. Read the objective they have been set up for. Click below:
The objectives of both the apex bodies mentions more about how they regulate the education standards rather than how it regulates the profession. The apex bodies do not mention how it promote standards in practise (professionals) and how does it protects the customers (patients). If the controlling body lacks tooth, how can the professions its monitors recognised internationally.

I do not feel good to read comments like
  • CAs - GLORIFIED CLERKS
  • CA is a course which ruins lifes
  • CA's are hopeless - A need for a new accounting regulator?
  • Largest Body??
However the bottom line is ICAI (and ICWAI) has been protected statutorily for long enough. Now time to gear their professionals to develop 360 and face the reality of globalisation.

Regards,

Santosh Puthran

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