Need of reforms in CA exams, an appeal 2 all student & members


(Guest)

 

                                Hi..friends..this is my first article…My name is Mohasin Tahasildar, Age 25.I am CA final yr student, living in Miraj Dist- Sangli Maharashtra (semi urban area). My Father is in profession of Tax Consultancy and also provides Accounting Services; he has his own small firm. Being the elder son, passing 12thstd., I joined the prestigious CA course in MAY 2004 with the only dream of becoming CA on day and joining  practice with my dad…

               so far i tried my level best..Studied uniformly for 10-12 hrs.. Prepared notes.. Got best coaching classes and attended it sincerely…referred best book’s ..  done article ship from  largest firm of our town.. size of which u can imagine ..as we were..Twenty articles..some 40 odd other paid staff..working in three storey office building …almost handled all kinds of work.. corporate-non corporate..stat audit…internal as well as tax audits..trusts.. VAT audit..got hand on excise ..service tax even MCA…assisted incorporation…registration to filling returns.. done everything almost single handedly (being having previous working knowledge in DAD’s office).. never complained for working hours ..worked almost 10-12 hours during Audit seasons..all in all I was dedicated to chartered accountancy and I’m satisfied with what I’ve done…completed article ship last yr… if you ask on social front..then ask my friends and family..I’m almost absent from family functions due to either work or exams from past 4-5 yrs ! friends say I’m growing workaholic…don’t see them often..( No Girl friend and all !- Just cleared :D)… I enjoy being the fame, glamour and Respect I get in my whole family and society as well… (as they know how tough course it is !)..and  passing CA final exam was my only goal..but still unachieved…. That fame and respect is fading these days…J

                              …Soon I realized that apart from being So dedicated to the course... belonging to accounting family.. besides having so sound practical knowledge and work experience… I’m not being able to clear CA exams in First stroke…  it took two attempts for passing PE I ..Three for PE II and just now I completed FIVE attempt of CA final…  this made me RESTLESS and I thought what went wrong ..study method..time management…writing practice… mock exams… reference books..classes… revision … meditation..prayers..( even considered an option of consulting a psychiatrist ! :P) … what and what not !!! done ..almost everything ..But no results

               All I could score is 340-355-339 in my last three attempts. Done re-verification for previous 3 attempts.  Even got certified copies of answer sheet for NOV 11…now I’m totally assured how subjective the term evaluation is!!! I don’t even feel like applying for re verification or certified copies now! Bt done same again as parents advised it for one last time… (as I lost exemption in LAW this time )

              But couldn’t understand what went wrong, Nothing worked my way! All these academic yr’s something made me restless and this is just an honest attempt to let ICAI know the condition of average student… and I asked myself a question does this course syllabus serves the need of producing a real chartered accountant.. ( as traditional image of chartered accountant is of practicing professional)..i guess not ! Current examination system and the syllabus is somewhat outdated..irrelevant ( in some cases) and I feel somewhere… in attempt of producing GLOBALLY COMPETENT ACCOUNTING PROFESSIONAL ( Competent with fellow countries CA;ACCA;CPA;CMA;CFA; MBA;CISA;Foreinsic Accountants; and sibling  professionals like CWA;CS and Lawyers to some extent) ICAI has made such a course design (that too Self Learning distance education Mode)… that has missed the core needs of practicing chartered accountant….working in larger part of INDIA.. Known as AUDITOR or in INSTITUTES sophisticated language….Small and Medium size practitioner!!!  I think in an attempt to provide best accounting professional they are missing the main link of work..the core area of Accounting, Taxation and Auditing ( in general practice @ grass root level –covering majority of india’s semi urban and rural area- except few metros like DELHI;MUMBAI:CHENNAI:KOLKATA  and large urban cities like Banglure:chandigad:Pune etc…) The need of the professional practicing chartered accountant and the one working in industry is VERY different ! Below is my analysis on examination system and my suggestions-

Reasoning \observations-

  • Ever since I joined the course I was clear that on clearing CA exams I will take over my father’s firm, like me there are thousands of students who are very clear in their mind that what they are going to do after qualifying? I mean practice or job in industry. The degree is SAME but does it serves both the purposes equally? I guess not!
  • The entire course is designed in distance learning mode and this is the biggest drawback, especially for students who will join industry later, as they lack communication and presentation skills compared to MBA’s. They never gained higher posts, of course there are exceptions, but majority of them are at clerical posts. Repetitive back office data analysis work is their fortune for rest of life..Very rarely they make it to the higher managerial posts. Institutes initiative to produce Highly Skilled and dynamic and now GLOBAL managers is somewhat hampered by mixed course study. 15 day GMCS course doesn’t serve the purpose!  3 months course is well come initiative but can’t we extend it throughout the academic yrs?
  • Now coming back to more serious part. The basic and traditional image of chartered accountant is of practicing professional having expert knowledge in the field of Accountancy, Auditing and taxation. Knowledge of regulatory framework their compliance is ancillary part. But that’s it! These are the core areas of practicing CA’s interest and he is expected to be expert in these fields. Knowledge of finance is brief and limited for specific purpose. The question is whether existing syllabus serves the purpose? I guess answer is no!
  • The present examination has very mechanical memory based system of traditional question answer format for evaluating student’s level of professional knowledge. I personally feel this is out dated format! Rigid clerical approach is on what examinations are based on!
  •  Majority CA student’s population is based at semi urban and rural areas. Their CA firms have very small range of work. During the articles every students doesn’t gets a chance to work on every aspect of accountancy, audit and  taxation, compliance laws especially corporate law related work. The students who are in major cities and metros are likely to get all type of work experience   easily. They get listed companies CARO reporting and statutory internal audit work very easily. Also in big 4 they get to work on international taxation..Reading treaty applying DTAA is never in faith of small town CA students then how come ICAI expects every passing CA of same standard? When we didn’t get actual work opportunity..How come we are going to face the actual memory based examination questions on complex but yet hypothetical issues. CA final is the stage were mugging up doesn’t help and I personally avoided it in every attempt.
  • In short every CA final aspirant is not on same footing to face traditional rigid memory based examination. CA institute is producing gems but each gem is of different grade and quality!!!

A small observation about the syllabus need of CA in practice and CA in industry under present system

CA in Practice

CA in Industry

Financial Reporting

The name of the subject is changed to Financial reporting but does it changed the basic accounting. It still is advanced accountancy- mechanical time bund paper solving exam!  Accountancy is language. It speaks something, reading accounts and preparing students to write strong notes to accounts is need of the hour but something is still missing!!! I remember old members still prepare notes to accounts and write down all the assumptions.

Major topic ( like consolidation, amalgamation, reconstruction)

Problems are based on hypothetical situations. Way to different from practical life based accounts requirement. Many topics like inflation accounting,human resource accounting, EVA, Gross value added are new concepts but never required in practicing CA’s lifetime. Instead book keeping work under tally / ERP s/w can be added to syllabus.

IFRS, regulatory frameworks and other international accounting standards in depth knowledge is required to be applied in real terms being in competition with ACCA and CPA’s we need to equip members with in depth financial reporting knowledge on international level.  Does present paper serve the purpose?

Indian Accounting standards  + IFRS

A member in practice needs to be very conversant in applying accounting standards. They are the back bone of financial reporting and regulatory frameworks. Plus a brief knowledge of IFRS is enough.  The thing is a separate paper on AS is required or at least practical accounting lab needs to be installed to make every student aware of detail prescripttttions of AS.

Our institute should make such a mechanism …so that every future member is well equipped for IFRS implementation. A separate certificate course should not be for the forthcoming members!   Plus detail knowledge of our own AS is expected so again they too need a separate paper on these combine subjects!

Strategic Financial Management

The subject itself is not required in practicing CA’s life. What is required is a very brief knowledge on financial concepts ( like Derivative, Portfolio, Dividend policy  FOREX Etc) they too required in the sense their financial reporting and impact on Tax laws is part and parcel of syllabus ! but at the same time Financial management relating to procuring loans and advances is must for CA’s in practice. How Term loan \ Housing Loan\ Cash credit loan is taken, RBI norms, various Subsidy workings. Project report and Credit monitoring analyses is not even in syllabus   but highly required in real life. Imagine a newly qualified chartered accountant opted for practice and he doesn’t know the banking and financial norms: the procedure of availing finance. In short practical banking and finance knowledge is required.

All the banking finance knowledge plus current Subject is required plus international import export procedure, practical FOREX, share and commodity trading knowledge of national and international level is need of members of industry who wants to work in finance field …one should be able to tap global investment..business opportunity !

Advanced Management Accountancy

I am still wondering if I ever used the costing knowledge in direct decision making problems. No doubt marginal costing and budgeting is useful but the same is already part of IPCC now and 50 marks paper is sufficient. I believe it’s not practicing CA’s core field.Q.T is just added birden in final ...assignment,transportation..LPP( in syllabus from 11th n 12th then F.Y grad Exm then in PE I and now again in Final !!!)..simulation etc doesn't serve a purpose and application in mid sized practising CA's career.. even institute has deleted that time series and test of hypothesis chapter, which was in syllabus for no of times !

Standard, Marginal and budgeting knowledge is necessary and modifications shall be made competent to CIMA professionals.

Corporate and Allied laws

Law being the core subject a strict list of applicable regulatory laws needs to be drawn and made part of course (Partnership, LLP, Companies, trust, co op societies etc.) presently all this is in syllabus but examination approach is very much rigid. Practical application is important rather than mugging the provisions. Contents of case laws are necessary rather than name of case laws. Procedure followed for registration cancellation, annual compliance /forms filing knowledge is required. Lab our laws, local laws, factory laws, constitutional framework and brief overview of administrative laws and procedure is required for practicing CA’s. Examination should be open book and not memory based. Laws is same what differs is it’s understanding and interpretations..Procedural CS knowledge needs to be infused!

Corporate law is core for members in industry and its allied laws like securities, FEMA are well covered by the present paper.

Advanced Auditing

Present syllabus of audit is very out dated. Auditing is nerve of chartered accountancy course; the syllabus should be designed in such a way that every type of audit and certification should get covered. Basic vouching verification and audit trace. Obtaining audit evidence is covered at IPCC level. Here at final stage a very precise and clear knowledge of specific audit reporting should be provided. Everything should get covered.  The Auditing LAB needs to be installed and drafting of audit report along with application of auditing standards is needed. Separate paper may serve the purpose.

Detail International Auditing standard knowledge and application is additionally needed.

Information System Control and Audit

Preliminary knowledge of Information Technology is already covered in IPCC. Every practicing chartered accountant is not interest in system audit. If at all any one is interested in further studies he can opt for ISA exam or CISA exams. Majority of the practicing members have no use of this knowledge that too this subject is just an overview! it puts extra burden on CA students .the chapter on computerized accounts and effect on auditing is covered in syllabus .so no need to go in technical terms of software development etc. but cyber law can be added as part of allied laws. That is relevant!

The members who are in industry and want to pursue higher certification course in system audit can have this subject but again they can separately go for CISA or ISA exam of the institute!

 

 

 

Direct Tax Laws

The main area of interest of Practicing CA! Procedural knowledge is much needed. Why an affidavit is prepared? How letter of authority is drafted, stamp paper requirement..CBDT’s Administrative structure knowledge..Their power and functions needs to be studied. Stress on RULES part and questions on use and filling of forms is necessary..Drafting Convincing and pleading paper on TAX LAWS is need of the hour as not every article get’s chance to go for scrutiny proceedings.( ask newly qualified CA to go and attend scrutiny proceedings ! 5 out of 10 CA’s will say that they never done that in their entire 3yr articles !!! they don’t even know how proceeding actually happen !!!)  How the assessment is practically done shall be taught in something called as TAX LABS. Both the members need in depth knowledge on international taxation.. Few tax treaties can be added for practice of DTAA.  Open book examination needed. DTC, The new developments like Tax Accounting standards (Though these are Not required) overview can be added. CA is expected to be MASTER of TAX LAWS

Indirect Tax Laws

Again Excise law procedure, service Tax and local VAT plus CST is the core IDT regime..Plus brief overview of TAX structure like local municipal Taxes and then various state Tax knowledge is expected from practicing chartered Accountant.  This is vast but unavoidable …when GST will come it will automatically get consolidated but till then practical LAB is needed. Every article shall know how to fill ER 1 or ST-3 or GAR 7 etc.. Sound uniform practical procedural knowledge needs to be infused among all students!

               

SUMMARY OF SUGGESTIONS-

  • There is need of two TWO separate qualifications but yet parallel designations of chartered accountants one is for practicing CA’s and other for members in industry. Members in industry needs specialization in particular subject of interest like finance, accounts, tax like there is specialization for MBA’s or in medical and engineering field.
  • Accordingly examination and syllabus should be different for both of them.
  • Open book examination system for subjects of LAW.
  • Efforts should be towards giving equal minimum training to all CA students ( Articles) as every article doesn’t gets chance to have same exposure as of big 4 articles, and big 4 articles doesn’t get chance to have knowledge on all subject they specialize in particular field only, like internal \ stat audit \DT ( international taxation) etc..
  • Class room training like oral coaching shall be provided..this may not be possible as infrastructure requirement is huge but it can be undertaken as pilot project.
  • During the article ship a Journal book completion assignment based on practical procedures for core subjects like DT, IDT, Accounts, Audit and Law can be prepared. This will help students gain working knowledge and also writing question answers will keep them in touch. ( SAME LIKE ENGINEERING and MEDICAL STUDENT)
  • Module should include practical’s or separate practical modules for core subjects  especially DT, IDT, Corporate law and general work need of CA’s..illustration based PRACTICAL LABS can be established as ACCOUNTING LAB, AUDIT LAB, TAX LAB,COMPLIENCE AND REPORTING LAW LABS at ICAI’s regional branches like and every student should attend these labs like colleges.  

 

Last but not the least background material to make student think on

ACCOUNTING/ AUDITING/TAX LAWS Research and development should be prepared ,putting some old history of how accounts and laws got developed ,how loop holes in sections removed; such a history will definitely help students to contribute towards R&D of CA profession. I observed it many times that international bodies pronounce amendments and developments and ICAI just ran after implementing the same..Of course ICAI made it compatible and suitable for Indian scenario like IFRS and International standards on auditing but can’t ICAI contribute to them.. I mean has it ever happened that ICAI made and they followed?  There are many subjects for example.. if I got an opportunity in R & D then I’ll definitely would love to prepare paper on Islamic banking and finance, Trading in financial instruments, Insurance all this concepts have been already been introduced in gulf and other Islamic countries but where I see an opportunity lies is developing its accounting framework and tax implications in Indian scenario .this will help us attract FDI from oil rich Gulf countries in banking, insurance, and share trading sector..And will boost our economy. Recognition of concept of ZAAKAT can be used to make more transparent wealth and income tax declaration. Apart from that Agricultural Accounting; Film Industry Accounting needs to be codified and regulated, mining, government bodies need uniform accounting practices. Ind AS 30, 31, 32 needs clarifications and many more..i know The work is going on many of these issues...but students also need to be made aware of changes and developments so that these can be implemented easily.all i want is just a background material to students..apart from students news letter and ICAI journal !!!

                                I can’t explain everything in detail here but still I gave it a try. I may be a bit frustrated right now as you may not find all this relevant (as I am a failed in examinations).Actually I am on the verge of leaving the course as I’ll try n pursue a degree in LAW and will join my father eventually. This is just a feedback I wish I would have given three four years back. This is an honest attempt to help MY INSTITUTE produce more dynamic, dedicated and competent accounting professional. The change is unavoidable. And I feel reforms in examination system are much needed. I hope institute takes cognizance of our state!  

                                I even forwarded this letter to ICAI president and also to Board of studies on 3 rd and again on 4th Aug…but as usual no response..but today browsing though Face book I found  CA Kumar Mangalam Birla commented on restructuring  the course..here is the link to that article…

https://www.business-standard.com/india/news/cas-face-major-challengembas-kumar-mangalam-birla/183324/on  &

https://www.facebook.com/CharteredClub/posts/460287430670011

So I thought sharing my first article on CA club india.. and please friends this is my personal opinion..Comments are welcome...and I appeal you guys to send your feedback’s to institute on it’s constantly changing Course structure ( PEI –PEII to CPT.. PCC to IPCC..Now again they changed entry requirement..articleship eligibility etc).. at ideas @ icai.org you can also write to board of studies and president..  I also appeal CACLUB INDIA and it’s administrators to give feedback and start a new debate on REFORMS WE NEED!  this may be the reason why CA's are not getting jobs easily...( i agree their is global slowdown, but still i believe we need to improve )               

Thank you very much for reading ….

 

                                                                                                                                                Your friend,

                                                                                                                                           Mohasin Tahasildar

                                                                                                                                (A Common Average CA student)

Note : it’s a personal opinion (feedback ) Should not be construed as defamation of ICAI..