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DIRECT AND INDIRECT SKILLS??????????

Anoop Shrivastava (Free Lancer) (476 Points)

28 April 2010

what are direct skills and indirect skills for ca???

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Life of a professional

Source : WWW.BCASONLINE.ORG

Article Details :

When a C.A. professional is called upon to write about his professional life, what comes uppermost in his mind is to draw up a Balance Sheet of Life. We Chartered Accountants, who certify financial statements, which include Balance Sheets of our client, try to give a ‘true and fair’ view of the state of affairs of the organisation. People judge the health of the organisation on the basis of our opinion. We should try to prepare Balance Sheet of our Life to find out whether it gives a ‘true and fair’ view of our actions in life.

One of our professional colleagues had once tried to state in a journal as to how Balance Sheet of a professional should appear. This write up appeared somewhat as under :

Balance sheet of a professional :

Liabilities	Assets
*Capital*	*Fixed Assets*
Character of Professional	Heart of Professional
*Reserves and Surplus*	*Goodwill*
Happiness in life	Soul of professional
*Liabilities*	*Investment*
Duties to the society	Your knowledge
	*Bank balance*
	Your mind
	*Accrued interest*
	Your patience
	*Accumulated losses*
	Your sorrows

One can summarise the Balance Sheet of Life in the above manner.

The essence of C.A. profession :

A professional commands respect in the society because his motto is ‘Pride of service in preference to personal gain’. He is described as one who places public good above his personal gain. This is the reason why Government, financial institutions and members of the public rely on a CA for his expert advice. This reliance imposes a public interest responsibility on our members, when they render services in the field of accounting, taxation or other fields.

For the success of any professional, it is essential that there is a strong base provided by the regulating body to which he is answerable. The system of education, training and examination should be such that he is able to command the respect and confidence of the members of the society. The users of professional services require an assurance that the member of the profession whose services are retained is (i) a person of character and integrity and (ii) competent and knowledgeable to render professional services.

The character and integrity of a professional will depend on his personal qualities. This will also be guided by the environment in which he has taken his education and training as well as the environment in which he is working. His position can be maintained and strengthened only if the regulating professional body is able to guide and encourage its members to live upto the high ethical and professional standards. The prestige and confidence enjoyed by a professional, to a great extent, depends on the strictness and scrupulous manner in which the professional code is implemented.

Bhagavad Geeta classifies castes (not communal) on the basis of different qualities and actions of a person. According to this classification a ‘Brahmana’, in whatever community the person is born, is one whose wisdom and knowledge is in his nature. Self-restraint, purity, uprightness and wisdom are the qualities of a ‘Brahmana’. It is for this reason that in the Indian Society all professionals, such as a CAs, lawyers, doctors, etc. are considered as Brahmanas. A C.A. professional does not own a business or industry but he does act as advisor of a businessman because of his study and knowledge. For this purpose, he has to keep himself updated in his knowledge as he is in constant touch with his client during his audit, tax and other assignment year after year. In other words, he has to be a student throughout his life.

Fundamental principles :

Our Institute has identified the following fundamental principles by which any professional should be governed in the conduct of his professional relations with others.

(i) Integrity :

A professional should be straightforward, honest and sincere in rendering professional services.

(ii) Objectivity :

A professional should be fair and should not allow prejudice or bias, conflict of interest or influence of others to override objectivity.

(iii) Independence :

When in public practice, a professional should both be and appear to be independent. Integrity and independence are the most essential characteristics of any professional. Independence implies that the judgement of a person is not subordinate to the wishes or directions of another person who might have engaged him or to his own self interest.

(iv) Confidentiality :

Information acquired in the course of his professional work has to be treated as most confidential. This should not be disclosed to any one without specific authority of the client or unless it is required to be disclosed for compliance with legal or professional requirements.

(v) Technical standards :

He must discharge his duties in accordance with the technical and professional standards relevant to the work assigned to him.

(vi) Professional competence :

He must maintain high level of competence throughout his professional career. He should undertake only such work which he or his firm is competent to handle and complete within the given time frame.

(vii) Ethical behaviour :

A professional should conduct himself in a manner consistent with the good reputation of the profession and refrain from any conduct which might bring discredit to the profession.

A professional who keeps the above seven principles before him and adopts them in his day-to-day practice can achieve great success in his professional practice. One may say it is difficult to adopt all these principles in the present day environment. However, if a professional wants to have peace of mind and get inner satisfaction of having served the society and the profession, he will have no option but to follow the path identified by the above principles.

Conduct in other fields :

Our Institute strives to maintain discipline amongst our members not only on matters relating to their professional conduct but also in relation to their conduct in other fields. It is for this reason that the Institute is given power to take disciplinary action against a member if he is found guilty of ‘Other Misconduct’. This is a very wide term. The Institute has, however, taken the view that a member of the profession is expected to maintain the highest standards of integrity in his personal conduct and any deviation from this high standard, even in personal affairs, would expose him to a disciplinary action.

A professional may be holding an office in a social or service organisation in his personal capacity. He may be a member, treasurer, secretary or chainman of such organisation. He may be an arbitrator, executor, liquidator or trustee in any trust, etc. in his personal capacity. In all such situations, his actions and decisions relating to financial, legal and other matters should be above board and he should not take any personal benefit in such capacity. This is because the society expects that a professional person will render service even in his personal capacity in the same manner as he renders his professional service.

When C.A. Act was amended in 2006, Part IV was added in the First Schedule to provide that a C.A., whether in practice or not, will be guilty of ‘Other Misconduct’ if he is held guilty by any Civil or Criminal Court of an offence which is punishable with imprisonment for a term not exceeding six months. It also provides that, if in the opinion of the Council, an action of any CA brings disrepute to the profession or the Institute, whether or not such action is related to his professional work, he will be held to be guilty of ‘other misconduct’.

Similarly, Part III has been added to the Second Schedule to provide that if a C.A., whether in practice or not, is held guilty by any civil or criminal court for an offence which is punishable with imprisonment for a term exceeding six months, he shall be considered as guilty of ‘Other Misconduct’.

Ethics in profession :

The word ‘Ethics’ is defined to mean ‘moral principles, quality of practice, a system of moral principles, the morals of individual action or practice’. Accordingly, his behaviour towards his professional brothers and sisters, his employees, articled assistants, clients, users of his service and general public should be governed by the above ethical principles. His personal conduct in a capacity other than his professional work should also be governed by these ethical principles.

The C.A. Act and Regulations provide for the Code of Ethics. Our Institute also publishes literature on the subject from time to time. As stated earlier, certain fundamental principles have been identified. Some of the Do’s and Don’ts about ethical behaviour of a C.A. professional are listed as under :

(i) Cannot engage in any business or occupation without the permission of the Council.

(ii) Cannot enter into partnership or share fees with a non-professional. Recently some relaxations are made about sharing of fees/partnership with other designated professionals such as Company Secretaries, Cost Accountants, Advocates, etc.

(iii) Cannot solicit professional work or advertise professional attainments, subject to certain exceptions.

(iv) Cannot charge fees based on percentage/contingency.

(v) Cannot allow a member who is not in practice or not his partner to sign financial statements or audit opinion on his behalf or on behalf of his firm.

(vi) Cannot disclose information acquired during the course of his professional or other engagement without the client’s permission.

(vii) Cannot express opinion on financial statements of an enterprise in which he or his relatives have substantial interest. This restriction also applies if his firm or a partner of the firm has substantial interest in the enterprise.

(viii) Performs professional duties without due diligence or is grossly negligent while performing his duties.

(ix) Cannot keep client’s money without opening separate bank account.

(x) Contravences any of the provision of the CA Act, Regulations and directions of the Council of ICAI.

Some quotations :

It may be useful to refer to two quotations of eminent personalities about how one should conduct oneself in life.

(i) Oscar Wilde has said about Meanings as under :

Standing for what you believe in,

Regardless of the odds against you,

and the pressure that tears at your resistance,

. . . means courage

Keeping a smile on your face,

when inside you feel like dying,

For the sake of supporting others,

. . . means strength

Stopping at nothing,

And doing what’s in your heart

You know is right,

. . . means determination

Doing more than is expected,

To make another’s life a little more bearable,

Without uttering a single complaint,

. . . means compassion

Helping a friend in need,

No matter the time or effort,

To the best of your ability,

. . . means loyalty

Giving more than you have,

And expecting nothing

But nothing in return,

. . . means selflessness

Holding your head high

And being the best you know you can be

When life seems to fall apart at your feet,

Facing each difficulty with the confidence

That time will bring you better tomorrows

And never giving up,

. . . means confidence.

(ii) Late Shri J.R.D. Tata on Guiding Principles :

· Nothing worthwhile is ever achieved without deep thought and hard-work.

· One must think for oneself and never accept at their face value slogans and catch phrases to which, unfortunately, our people are too easily susceptible.

· One must forever strive for excellence or even perfection, in any task however small, and never be satisfied with the second best.

· No success or achievement in material terms is worthwhile unless it serves the need or interests of the country and its people and is achieved by fair and honest means.

· Good human relations not only bring great personal rewards but are essential to the success of any enterprise.

A true professional :

Late Shri Nani A. Palkhiwala has explained as to who can be called a True Professional, as under :

· First a man must have the courage of his convictions.

· He must not be coward.

· He must honestly believe certain things and he must say publicity what he believes privately.

· Secondly he must have integrity

— Not only financial integrity

But

— Intellectual integrity also.

· He must have intellectual honesty which makes him say what he believes to be right.

· So, if a Chartered Accountant or a Lawyer has intellectual integrity, he will never give an opinion merely to suit the client.

· The professional man must have that ideal before him, when he advises his clients.

· Lastly, humility is just as important as courage and intellectual integrity.

· The higher the man goes in life the humbler he should be.

In this context a Bhajan by Narsingh Mehta is most appropriate.

Vaishnav Jan :

— Who is vaishnav — A person who is nearer to Lord Vishnu.

— He who knows difficulties of others.

— He who will help the needy person but will not boast about the same.

— He who is humble to all and will never speak ill of others.

— He who is upright in his — Speech

— Hearing others

— Mind

— He who will always speak truth.

— He who will never touch monies belonging to others.

— He who is never greedy.

— He who is detached and never angry.

If a person can imbibe these qualifies of a true vaishnav he can be a ‘true professional’.

In this article an attempt has been made to explain what qualities a professional has to have in his life.

When a person wants to choose his career and take a decision whether to join a business or profession, he should be ready to make a sacrifice if he selects to join a profession. He will have to keep in mind that motto of a profession is ‘Pride of Service in preference to personal gain’. He has to place public good above his personal gain. He cannot mix profession with business as there will be conflict of interest. As stated earlier, a professional has to keep the fundamental principles enunciated by professional bodies uppermost in his mind while performing his duties. He has to follow these principles even in his personal actions not connected with his professional duties. In short, he has to act as a ‘Vaishnav’ to be a true professional. He has to draw up Balance Sheet of his life at periodical intervals and determine whether it gives a ‘true and fair view’ of his behaviour and actions

direct skills and indirect skills for ca??? - refer qualities of auditor in IPCC auditing book.