The November 18th announcement made by ICAI seeking attention of those appearing for Nov, 2014 is definitely a step backward. After the entire Hullabaloo, post November 5th when CA final students were shell shocked to find themselves staring at the Paper 1 Financial Reporting and also a couple of days later for students writing the Strategic Financial Management.
A great debate arose amongst the CA and its student fraternity in the sudden rise of standards and professional acumen expected from students. While most of the students appearing for the exams could not understandably react during the heat of the debate, Faculties across the country made remarks which were not well received by students appearing for the exams who considered themselves as Sacrificial Lambs. One of the prominent faculties seems to have remarked congratulating The Institute of Chartered Accountants for the bold step it decided to take and raise the standards of the coveted professional exams. He further seems to have added that students should take efforts to refurbish themselves with the advancements and updates being made in the contemporary world of Financial Reporting and Financial Management.
I will not reason out the arguments made by the concerned faculty. If the institute expects it future members to possess such worthy skills and also be more knowledgeable (at least during examinations) than their predecessors who had cleared the more normal examinations (a term 1 heard during the exams), it has all the rights and resources to ensure such novel intentions. However in this light one finds the following announcement disturbing.
This is to bring to the notice of students that the Companies Act, 2013 notified in the Official Gazette on 30th August, 2013 (with partial enforcement of only 98 sections of the Companies Act, 2013 from 12th September, 2013) shall not be applicable for May 2014 examinations both at the Intermediate (IPC) and Final levels.
The examinations will be based only on the existing syllabus.
A layman’s understanding of the intentions of the ICAI are that students should only keep updates with regard to papers like Financial Reporting, Strategic Financial Management and Tax papers. When the corporate world and various accounting firms hailed the passage of the Companies Act, 2013 in the month of August earlier this year as a right step forward, why does the ICAI want to delay testing students on the new Companies Act.
The decision to delay in introducing a new Companies Act syllabus is actually contrary to the Institute’s intentions in testing students with latest amendments in Law related Subjects like Taxation and Financial Reporting. About a year earlier in 2012 when the Then Finance minister had decided to introduce Negative List (Sec 65-B) to levy taxes on various services (barring those in Negative List), the institute showed great courage in amending the then syllabus for November 2012 examinations. The ICAI also generally tests students mostly in recently amendments (plus the adorable Assessment Procedures) in Direct Tax and also made it clear to students that they should be updated with the amendments made with regard to the Revised Schedule VI.
The instances sought above display the alacrity of the ICAI when it comes to recent amendments in law related syllabus and subjects. Hence one is bewildered at the reluctance of the institute in introducing the New Companies Act in its syllabus. Why add only 98 sections from the new Act to the existing syllabus of Companies Act, 1956 and other allied laws when there is sufficient time to prepare for the subjects?
Even if the institute deems it fit to continue with Companies Act, 1956, professionals might find it absurd to give more weightage to a dead act over equally relevant laws like The SCRA, SEBI1992, Competition Act, 2002 Prevention of Money Laundering, 2002, FEMA, 1999 and others. Since the weightage towards Companies Act is slightly more about 20 marks over the entire gamut of Allied Laws, Students do not give the necessary attention to equally relevant corporate legislations. The institute should take efforts to ensure that Students give equal importance to these topics. A quick glance at various financial dailies like ET, BL and Mint only substantiate the point made above. Numerous references are made to Competition Act, SEBI regulations etc and the Companies Act, 2013 (and absolutely negligible reference of Companies Act, 1956).
‘Contempranea expositoest optima et fortissima lege’
However the recent announcement of continuing with the existing syllabus has brought cheer to CA students who seem to be heaving a sigh of relief in various social forums. However from a student perspective, one considers that students have been denied an ideal opportunity to enrich their acumen and knowledge in Legal Interpretations.
The last chapter in the Institute Module for Paper-4 is Interpretation of Statutes, Deeds and Documents where a beautiful rule of interpretation is discussed. Contempranea expositoest optima et fortissima lege- A contemporaneous exposition is the Best and more powerful in Law. In the absence of numerous guide books or a copied version of Institute Material by various authors and publishers on the topic, the students would have brought loads of delight to themselves while referring the bare act. (I can imagine Gun shots being fired at me by students who read this) but the best professional minds in the country have always made a case of referring the Legislation. Trust me it is not as laborious as it seems like. I have come across some established professionals in Taxation who have always insisted in reading the Statutes in its original form for better understanding. Recently R. Bhupathi, Former ICAI-President in an interaction with students over the ICAI TV while discussing Preparations for Direct Tax paper asked students to read various provisions in their original format.
Bare rip offs or enriched skills in MS-Word done by contemporary authors when it comes to Paper-3 and Paper 4 is a disturbing trend and Institute must act in this regard to bring an end to this practice.
Conclusion
Writing an article or making a point about what one should do after ICAI has declared it is easier said than done as students have to read from Sec 205 to Sec 600 of the Companies Act, 1956 (most of the sections had already been deleted through various amendments made earlier). However subjects like Law and Audit which are often sniggered at by students for being mere theory subjects need delicate handling and the institute should work in this regard to make them look like less of a burden and more of a delight. If the institute is mindful of enhancing the quality of a CA-student and future professionals, it necessitates a core subject like Law is admired by students and not frowned upon.
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