Now Reserve bank governor also cautions CAs against ‘Enronisation’- In One of programme organised by ICAI( Chatered Institute)

Subbarao cautions CAs against ‘Enronisation’

Duvvuri Subbarao on Friday called chartered accountants “the conscience-keepers of the business world,” but stopped just short of recommending stricter regulation of the profession.

“The conduct of Enron, Parmalat etc under the very nose of auditors has raised question about the effectiveness of soft regulation. The profession has to find a way of remedying this if it wants to prevent the imposition of an external regulator,” the Reserve Bank governor said, speaking at the conference of the Western India Regional Council of the Institute of Chartered Accountants of India (ICAI).

Subbarao questioned accountants providing auditing as well as consultancy services, as in the case of Arthur Andersen, which provided accounting services to Enron.

“Andersen did not discover that Enron was publishing incorrect financial statements leading to the term ‘Enronisation of financial statements’,” he said.

The profession has shied away from its responsibility in relation to prevention and early detection of frauds, the RBI governor said, warning that other agencies could displace auditors if chartered accountants were not willing to provide such services, depriving them of a potentially expanding opportunity.

It was possible to reduce the frequency with which public sector banks (PSBs) are audited by using technologies such as core banking and centralised record keeping, he said.

“Currently, the cost of audit of PSBs is significantly higher than the cost of audit of comparable private sector banks. However, the institute has been resisting this because it would mean a reduction in work for its members.”

The RBI governor also drew attention to differences in identification of non-performing assets (NPAs) by the supervisory inspection conducted by the RBI and certified auditors. “In the Reserve Bank’s view, in certain cases, the statutory auditors have underestimated the extent of NPAs and the required provisioning. Since RBI, as the supervisor of the banking system, relies and leverages on the work done by auditors, the profession should effectively address this issue,” he said.

The value systems followed by auditors came up for questioning too. Citing the accounting fraud at Satyam Computer Services, where nearly $1 billion was hidden from the company’s board, its senior managers and the auditors for several years, Subbarao said the erosion of values in public domain was a huge concern.

“With so much accounting misconduct in big corporations, stakeholders wonder why books are not being reviewed on the default assumption that there could be fraud afoot,” he said.
He said the central bank had advised all bankers to set up an audit committee of the board of directors. The chief executive officer of a bank is kept out of such a committee to keep it independent, though the executive director is allowed in to offer insider perspective.

Subbarao, however, asked the accountants for their views on allowing the ED on board as even that may compromise the independence of the committee.

https://www.dnaindia.com/money/report_subbarao-cautions-cas-against-enronisation_1626890

I agree with Mr R K Gupta s view that CS and CMA gets lesser pay than CA .But Gupta ji , you will have to chime in with me that CA is paid more because recruiter believe that this fellow will be able to manipulate and a certain portion of money escaped through the tax net will be paid as renumeration whereas CS will insist for compliance.Earlier CA were entreprneur and no. of CA in practice were more now due to losing self confidence no. of CA in practice is lesser and lesser day by day.What is the difference between CA in service and ICWA in service.PSU is the best example for not differentiating ICWA and CA in open recruitment.Where one will find no. of ICWA working as DirecTor (F) is more in comparison to CA.In aarakshan , one dialogue is appreciable when saif ali khan says, For knowing the merit, starting line in the race should be same.Where as ICAI always try to remain ahead by using saam , dan ,dand and Bhed.So i agree if ICWA have to make media news they have to do some media catching thing like involve in some scam etc.

if CWA's are given powers to do financial audit,  it is only on condition that CWA's should pass ACCounting and Finance papers conducted by ICAI at all levels.

if any political leader involves in a scam, IS THERE ANY 'ALTERNATE' TO RULE THE COUNTRY RATHER THAN POLITICAL LEADERS. no such things happend in india. because laws are accepted with their consent.

what are the reasons behind asking powers to do financial audit?

up on giving powers to do financial audit by CWA's is there any decrease in  frauds/scams. they are also human beings, but then the name appeared is he is a cost accountan. thats it. 

Really ICWAI wants their members qualification in par with CA's improve their paper standards and valuation standards. which the ICAI already adopted.

Dear Mr DK, 

It may be true that few CA's are involved in some financial frauds. But dont generalize it by your statement that all CA's are paid by businessmen for doing frauds. We know what we have to do. Please dont interfere.

Even our few ministers are involved in financial frauds. Does it mean that our entire govt is doing the fraud?? or will it make you to ask for Prime ministers seat reserved for only ICWAs?? Or , do you mean to say that all CWA's are true to their profession ??

If any of the CA is proved to get involved in any fraud then ICAI is taking disciplinary actions against those members also. Why you are not mentioning that? You can get the list of such members also in the website of ICAI. We are proudly telling that we have put such a list of members available for public? Is that enough transparent  and clear to you??

Please dont make such rubbish comments about such an Institute or its members.

Originally posted by : sharath
	if any political leader involves in a scam, IS THERE ANY 'ALTERNATE' TO RULE THE COUNTRY RATHER THAN POLITICAL LEADERS. no such things happend in india. because laws are accepted with their consent. what are the reasons behind asking powers to do financial audit? up on giving powers to do financial audit by CWA's is there any decrease in  frauds/scams. they are also human beings, but then the name appeared is he is a cost accountan. thats it.  Really ICWAI wants their members qualification in par with CA's improve their paper standards and valuation standards. which the ICAI already adopted.

Who told you that paper of CWA is not as per standard of CA, Many student passed CA but did not qualify CWA. We are ready to take the challange. Pl. give scope to appear in Final Level we will definitely show where we stand. You are constantly saying that we are not as per your standard, so pl. give scope. We want to prove our selves . As many of CWA opt CWA against CA to do jobs to earn bread & butter for  their family instead of doing article ship. I am requesting to your institute to give us scope we will show you. It is my personal openion not ICWA Institute.

Moreover questionsetter of CWA includes CA, MBA, CS & evalution also done by also CA,CWA,CS, MBA

So it is not fair to say about paper standard & valuation methods.

So before blame us pl. give challange then say any thing against us.

regards.

Dear Mr Chandranath,

The value of 3 yrs articleship is know when we compare a fresh CA and a fresh CWA. Am not for any arguement, but surely the articleship is an upperhand for the quality of a professional Accountant. May be it is not yet realised by any of the CWA including you. Also we are not challenging anybody including you for CA exams because Simply passing of exams won't make a CA from a student. 

Regards

Dear Sharth, if you are feeling uncomfortable in Accounting and Finance Paper, does it mean other also.Now the question is of interference, then i think that my dear friend is not aware of the genesis of debate.In the standing committee report, it has been stated that name change could not be considered in view of the vehement opposition of ICAI.So it is ICAI , who is interfering not ICWAI.Mr. Chandranath, CA and ICWA coexist in the environment  where you live today.If i am not wrong , ask any rankholder , he must be having ICWA degree also.But since, Govt has given much aegis to ICAI by opening statutory audit and tax to them, they practice being a member of ICAI.You are boasting of article ship and  i saw a number of CA s, who boasted that i got dummy articleship .Gentleman, keep the house in order then make a comments in behalf of all.

Earlier CCI was there, subsequently Govt. disbanded CCI and given the power vested with CCI to SEBI.So it is the Govt. only who can twist or ruin the fortune of the Institution.It is not accepted that becoming CA, increase the  capabilty.Thank Govt. that they continue to empower ICAI and make damage to ICWAI.

Quote

If any of the CA is proved to get involved in any fraud then ICAI is taking disciplinary actions against those members also. Why you are not mentioning that? You can get the list of such members also in the website of ICAI. We are proudly telling that we have put such a list of members available for public? Is that enough transparent  and clear to you?,

Unquote

but why this situation have arose that you have to defend them , see i am not saying, you go through the rajyasabha web site and read the unedited debate on that website then draw a conclusion that where the improvement is required. Naam bade or darshan chotte.

Dear DK,

In every baskets there will be good and bad apples. Does it means all apples are equally bad.  It also shows that improvements are needed and that will be taken care by our Institute and GOI. You can still throw stones as the tree is having more fruits. :)

Naam bhii bade or darshan bhii badea he bhai..!

My personal experience- I took 4.5 years to pass CA and 7 years to pass ICWA. Who says that ICWA is a  cake walk?

CAs who are claiming that standards of CA is higher than ICWA, request them to solve the questions for last four terms of the following three papaers of ICWA

Capital Market Analysis and Corporate Laws; Financial Management anf International Finance and Business Valuation Management.

Let all the CA come down to the ground instead of flying high  with some utopian idea which leads towards superiority complex without any ground reality.

If CA s are so superior then what is the problem of the institute to accept the change of nomenclature of another institute. Are they scared of competition?

Originally posted by : DK
	Dear Sharth, if you are feeling uncomfortable in Accounting and Finance Paper, does it mean other also.Now the question is of interference, then i think that my dear friend is not aware of the genesis of debate.In the standing committee report, it has been stated that name change could not be considered in view of the vehement opposition of ICAI.So it is ICAI , who is interfering not ICWAI.Mr. Chandranath, CA and ICWA coexist in the environment  where you live today.If i am not wrong , ask any rankholder , he must be having ICWA degree also.But since, Govt has given much aegis to ICAI by opening statutory audit and tax to them, they practice being a member of ICAI.You are boasting of article ship and  i saw a number of CA s, who boasted that i got dummy articleship .Gentleman, keep the house in order then make a comments in behalf of all. Earlier CCI was there, subsequently Govt. disbanded CCI and given the power vested with CCI to SEBI.So it is the Govt. only who can twist or ruin the fortune of the Institution.It is not accepted that becoming CA, increase the  capabilty.Thank Govt. that they continue to empower ICAI and make damage to ICWAI. Quote If any of the CA is proved to get involved in any fraud then ICAI is taking disciplinary actions against those members also. Why you are not mentioning that? You can get the list of such members also in the website of ICAI. We are proudly telling that we have put such a list of members available for public? Is that enough transparent  and clear to you?,   Unquote but why this situation have arose that you have to defend them , see i am not saying, you go through the rajyasabha web site and read the unedited debate on that website then draw a conclusion that where the improvement is required. Naam bade or darshan chotte.

But I think if all three institute give some common benefit under mutual consent to each other, like 3 years working in a managerial capacity with some specified capital against 3 years articleship  & common paper so enmity among all three profession will be minimised. If you want to do CA's jobs be CA & if you want to Cost audit do CWA & if you want to be a Company Secretary be a CS.

Dear DK,

Iam always comfortable with my accounts and Finance subjects.

reason for mentioning 2 papers:

1.

where CWA's given power to do financial audit, expertise is required in both accounts and finance point of you, thats why i mention the two subjects,

2.

if CA's are inviting to do cost audit then CA's are tested with costing exam  CWA  costing paper.

Iam not favour of any one institute. but the service is most important

 +points of ICAI is

providing good service to students.

creating opportunities

buildin up proffesions goodwill over 60years

compulsory traing to students is required to become member of ICAI.

iam not going for debate of which qualification is better, both are better if functions of their members are different, if both are doing same functions why two different institutes?

this is my opinion only,  do not take personal, iam not blaming any CWA student.

CHARTERED HV TO BE REMOVE

......REASON IS THAT ALL PROFESSION SHLD BE ON SAME PLATFORM...

ONE PROFESSION SHLD RESPECT OTHER PROFESSION ,,

,OTHERWISE OUR COUNTRY WILL NT GROW...EXPECTED..

Dear Chandranath,

How can these three professions be given with same training?? Can you compare yourself with any other individual? Each course have its own focussing and training methods it cannot be taken to a common platform. Each of these institutes are have a separate identity in the corporate world. Also we dont require such kind of a 'supermarket system' where anybody can select any product.

Also the intensive articleship training cannot be replaced by any other sort of training or job. Then it will also become just a formal requirement for appearing exams. Articleship training is done for an overall improvement of the student which will help him all through his career. If any person avoid CA course just due to articleship, its at his own fault. I know successfull CA's who went for part time work at nyt and compleated CA course. And without enough practical training during the course the CWA freshers cannot be compared with CA freshers.

Regards

Following are extracts from the recent press release:-

The President and members of the Council of the Institute of Cost and Works

Accountants of India express their utmost unhappiness on the passing of the ICWAI

Amendment Bill in the Rajya Sabha on 12th Dec 2011, by which the name was

proposed to be changed to the Institute of Cost Accountants of India. Our Institute

strongly objects to the move by the sister professional body in interfering the activities of

the another professional body to encourage foreign management accounting bodies to

establish their presence in India to the detriment of Indian professionals. The Hon’ble

Minister in his reply to the debate in Rajya Sabha also questioned “After

independence, why a colonial name like Chartered should be there. You know,

this is a matter which is left to the Chartered Accountants of India to consider.”

My reply to statement is very simple. The above statement state that ICAI is interfrering in the activities of ICWAI(ICAI Now proposed) Now Can ICWAI prove the correctness of this statement keeping in view that the advice was sought by MCA in this regard from ICAI. Now if they can prove then can move to court of law.

We also demand that in the post independence era let the Government also change the

name of the Institute of Chartered Accountants of India into some other name or remove

the name “Chartered”. While for this the Government feels that it is the matter which

has to be taken up by the Chartered Institute, in our case we find that without our

consent our name is proposed to be changed at the behest of The Institute of Chartered

Accountants of India. The dominant position enjoyed by the Chartered Accountants are

taken advantage by that Institute in creating block for a sister professional body which is

catering to the youth to get a professional accounting qualification while working in

whatever employment they are already in, to further their growth prospects.

My reply to above is that in first phase of this they are saying that ICAI is interfering activities now they themselves demand a name change of ICAI. On the another hand the name change of ICWAI was sought by ICWAI itself. Again at end they claim that there name is changed on the behest of ICAI, but can they prove this in court of law.

One more thing the motion was passed by Rajya Sabha so now if ICAI wishes they can move to court for such an allegation leveled by ICWAI.

The Institute of Chartered Accountants of India have been continuously interfering with

the name change of our Institute, objecting to the name by which the similar cost

accounting bodies across the globe are called. Unfortunately, due to their dominant

position which was recognized even in the Report of the Standing Committee of

Parliament, our genuine request is not heeded by the Government. In the Rajya

Sabha’s debate during the Bill many Honourable Members commented that the entry of

foreign consulting firms through surrogate Indian audit firms should not be encouraged.

They also commented that “That is why it is quite possible that money is illegally

taken by some entities to foreign countries with the advice and superb

consultancy with the Chartered Accountants ……. That is why along with the

quantity of Chartered Accountants ……… the professional ethics in this country

Again the reply was very simple they say that CAs enjoy a dominant position in the standing committee and also opposing the move of Rajya sabha. So in a way they are opposing and doubting the work of Members of Rajya Sabha and claiming the work of standing committee was biased.

On the issue of black money if superb consultancy of some CAs is responsible for some foreign entities then on the other sides superb consultancy and work is done by some CAs is done in organizations such as SFIO, DRI, ED and also in CAG.

At the end these press release is an Unsigned who issued this release is still not known so it can’t be used in court of law.

Note: All opinions given above are my personal views on the present issue and in no way mean degrade, disrespect or hurt anyone personally.