Why the proposed CA course doesn't really shorten the length of the course

Discussing the draft notification from students' POV

The most catchy headline for all of us, especially CA students, in the draft notification of the proposed changes in the CA course, is that the articleship period has been cut down from 3 years to 2 years. Our eyes light up at the possible prospect of being able to start earning the meaty CA income/salary, a year earlier than our senior peers. However, that may not be the case. I'll discuss that and all the changes along with the good, the bad and the ugly of the draft notification of the new changes. We'll also discuss the opinion of professors on the alleged changes in the examination course that are not in the notification but have been doing the rounds and have a high likelihood of being adopted by the Council.

To start with, the implementation and applicability of the course is a while away. The notification is live on the ICAI website and open to comments and suggestions from students, members and professors for the next 30 days. After that the council will take the suggestions into consideration, approve the notification and forward it to the MCA who in turn may send it back with their own suggestions. All in all, it looks like the changes may not be implemented before 2023!

Let's discuss the major changes at each level of CA

STEP 1: FOUNDATION CA

1. You can register for Foundation CA right after passing your tenth standard. The registration will be valid for 4 years so you have to appear for Foundation exam in 4 years of registration.
2. To pass the exam, you must get at least 50% in each Currently, the minimum requirement was 40% per paper and 50% overall.

OPINION

Increasing the pass percent requirement means the council is making the entry barrier more stringent.

STEP 2: INTERMEDIATE CA

1. Intermediate CA registration is valid for 5 years. If you haven't been able to appear for the exam or haven't been able to clear the exam in 5 years then you are allowed a 1 time revalidation which will give you another 5 years. So you get 10 years to complete and clear the intermediate exam.
2. If you have cleared intermediate course of CS or CMA, then you can appear for Intermediate CA
3. Here's an interesting provision in the Until now, students are allowed to appear for Group 1, Group 2 or both together. Now the notification allows students to appear in a unit of papers that comprise a few papers from group 1 and a few from group 2. So basically, it seems like you can mix up the subjects from the 2 groups and appear for them.
4. Those who cleared intermediate CA exams, completed the articleship training but are unable to clear Final CA, can call themselves Business Accounting
5. Those who have cleared both Inter CA levels will now have to appear online exams

 

 

 

 

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STEP 3: ARTICLESHIP

Lots of changes here and very important ones.

1. The training period has been cut from 3 years to 2 years. For industrial training the period has been cut from 18 months to 12 months. If you think this will reduce the time you will take to become a Chartered Accountant, I will explain why that may not happen as you continue reading.
2. The minimum stipend has been Increased to Rs. 4,000, 3,000 and 2,000 for 1st year depending on population of the city you're training in. Currently, the first year stipend for a city with a population of more than 20 lk is Rs. 2,000. For industrial training the minimum stipend has been hiked to Rs. 15,000
3. Articles allowed 12 days of leave per 24 days in total
4. If you're already registered as an article, this new course will not be applicable to

OPINION

While articleship period is being reduced from 3 years to 2 years on paper, the 2 year period doesn't allow for any training period or study leaves. In your 3 year articleship, you were allowed to take 5 months of to study for Intermediate CA group 2 or Final CA. Now no such leaves and you get your 5-6 month study period only after you complete the 2 year articleship.

The minimum stipend is still being kept very low. In 2008, I received a stipend of Rs. 3000 in my first year, Rs. 4000 in my second year and Rs. 5,000 in my third year, in the city of Mumbai. It seems like practicing CAs will continue to get cheap labour. The difference is more glaring when you compare it will industrial training where the stipend is kept at a minimum of Rs. 15,000. Huge difference

STEP 4: FINAL CA

• Registration valid for 10 years. If you haven't been able to appear for the exam or haven't been able to clear the exam in 10 years then you are allowed a 1 time revalidation which will give you another 10 years. So you get 20 years to complete and clear the Final exam

APPEARING FOR THE INTER AND FINAL EXAMS

1. Interesting change in the exemption Currently, if you get more than 60 in a paper, you're allowed to carry forward that exemption for 3 years. In the new course, you're allowed to avail this exemption beyond the 3rd attempt, BUT you have to score at least 50 marks in the other papers of that group. This carry forward is an option, not compulsory. So if you don't feel confident of scoring a minimum of 50 in the other papers, you can opt to reappear for the paper you got an exemption in.
2. The council has also made a mention of negative marking and included MCQs at each level. Details to follow.

STEP 5: GETTING A CERTIFICATE OF PRACTICE

1. All CAs aspiring to practice must work for 1 year with a FCA in practice, after completing the CA
2. If you are currently in a job but want to start practice, then you must have at least 1 year experience doing practice, in the last 5 years. If you don't, then apply for the same and then enrol for
3. Those who don't want to practice can start their job in their field of choice immediately after clearing CA.

OPINION

The notification mentions minimum stipend for 1st year and 2nd year, as mentioned above but also a '3rd year' of training. If articleship has been cut down to 2 years, this 3rd year could only imply the 1 year post qualification experience that has to be taken with a FCA if one wants to get a COP, as mentioned here. If it is so, then to pay a qualified Chartered Accountant a measly Rs. 6,000 (that too if its a firm in a big city, smaller cities is Rs. 5,000 and Rs. 4,000) is pitiful.

WHY THE COURSE IS NOT GETTING 'SHORTENED'?

If you think you can now become a CA in 3 or 3.5 years instead of 4, think again! The best way to explain this is by example.

Lets assume you appear for your 12th standard exam in March 2024. Here's what the timeline will look like:

• March 2024: Appear for 12th exam
• April 2024: Register for Foundation CA (If you haven't done so 2 years ago after the tenth standard. Date of registration doesn't make a difference but ensure you do it at least 6 months before you want to appear for the exam)
• Nov 2024: Appear for Foundation CA
• Nov 2025: Appear for Intermediate CA
• Feb 2026: Receive results
• April 2026: Start 2 years of articleship
• April 2028: Complete articleship
• Nov 2028: Appear for Final CA
• Jan 2029: Receive results
• Jan 2029: Start industry job or enrol with FCA to receive COP
• Jan 2030: Complete 1 year work experience with a FCA (Salary not clear) and then apply for COP
• So if you want to practice as a CA, your total duration has actually been elongated, leave alone being shortened. In a way an entry barrier has been created for practicing CA

OTHER CHANGES NOT IN NOTIFICATION BUT BEING DISCUSSED

CA FOUNDATION EXAM COURSE

• Accounts Law
• Quantitative analysis Economics
• It is said that the Intermediate and final exams in the new course will have 6 subjects instead of 8.

CA INTERMEDIATE EXAM COURSE

Group 1

• Accounts: Syllabus will be increased as Advanced Accounts topic will be merged into this
• Law: Syllabus will be increase, Other law will be removed; direct tax may be included
• Costing

Group 2

• Taxation
• Audit + Ethics
• FM + SM
• WHAT'S REMOVED: EIS, Other law.

CA FINAL EXAM COURSE

Group 1

• Financial reporting SFM
• Audit

Group 2

• Direct tax
• Indirect tax
• Multidisciplinary case studies
• WHAT'S REMOVED: EIS. Law, Costing and performance evaluation moved to online mode

Prof Kapasi of Kapasi Classes says that the study modules are an improvement because there is a sharpened focus on the primary fields of Chartered Accountancy - Accounts, Taxation and Audit. He also says that the retention of Financial Management subject is a great move because that is a lucrative and exciting field for CAs to be in.

Having taught Final CA Costing for more than 30 years, he notes how its a subject that relied heavily on case studies. By including 'multidisciplinary case studies' as a subject, the council is recognising that while also giving students a more practical flavour.

Law and tax professor, Prof Akhtar notes that students won't be tested on Law so those who hate mugging are saved. And those who are interested can take online courses later.

The removal of EIS also comes as a breather.

However, while it may appear that the number of papers in each exam and group have been reduced from 4 to 3, it is highly probable that the quantity and intensity of all the papers will be increased. For example, it's highly probable that significant chapters of EIS will be included in Audit. Similarly, important chapters of Law may be integrated with other subjects