Should Chartered Accountants enter into practice?
Girish Borkar 12 July 2013

Unless the ICAI changes its role and becomes more of a quality educator, it would be better to look at other career options and not practice as a CA

I am a relatively small practicing CA, and I get almost 600 mails a month for articleship and for jobs for freshly qualified CAs. Why this sudden flood of applications? Over the years the Institute of Chartered Accountants of India (ICAI) has quite literally liberalized the passing out percentage to such an extent that today more than 30% students pass out every six months as qualified chartered accountants! It is good that so many CAs are passing out, but, is the institute ensuring that each freshly qualified CA is competent and based on that competency does it ensure that the fresh CA gets gainful employment? Is the ICAI following a sane education policy? Does the industry have the capability to absorb so many CAs? Or are we devaluing the profession by just pushing in numbers without taking care of quality?

 

I do not deny that there will be brilliant students—but at the same time we are also stuck with mediocre students who proudly prefix their name with ‘CA’! Today a CA can be hired for as little as Rs20,000 per month and still one finds that CAs are jobless! This is as much as a graduate gets in a call centre! Should the ICAI not have a re-look at its policy of passing students?

 

No job, alternative–practice?
 

With CAs flooding the market and not getting a job, the alternative is to start a practice—which is easier said than done as the cost of setting up a new practice in metros is very steep with property prices and rentals beyond the reach of most freshly qualified CAs budgets.

 

I have been in practice for the last 24 years and the challenges faced in practice are phenomenal—especially if you want to follow the straight and narrow path. Clients do not like an increase in fees, traditional practice is getting redundant and does not have value—in fact it is losing monetary value! The new economy is throwing more challenges and unless the smaller firms consolidate and innovate they too will become redundant, with the big CA firms in a much better position to corner all the glory work with economies of scale and contacts at high levels. Let me run you through some traditional practice models and its revenue stream showing which will show that fees have stagnated while costs have gone through the roof.
 

1. Return filing
 

The return filing fees in 1990 was Rs1,500 and even now a CA cannot charge more than Rs2,000. The purchasing power of Rs1,500-Rs2,000 was far greater in 1990 whereas in 2013 it does not pay for a dinner for a family of four at a decent restaurant. The same is true for VAT.
 

2. Assessment hearing
 

The assessment proceedings have greatly reduced. In any case the same pattern. It was great value to charge Rs2,000 per hour in 1990 and we cannot increase the same by inflation rate. If Rs2,000 of 1990 has become Rs20,000 in value in 2013 we cannot charge Rs20,000 per hour. Even if we charge the client laughs to our face!
 

3. Audit Fees/Certification Fees
 

A similar pattern follows for audit fees and certification fees. With much greater risk and responsibility thrown onto the auditors, the clients hate to increase fees. With so many CAs flooding the market, we are developing a rubber stamp culture where CA shopping is done to see who certifies at a lower rate—something like the notaries who run after you outside every court for getting the job done through them!
 

Costs
 

Unfortunately CAs have not remained immune to inflation unlike the clients’ propensity to pay appropriate and fair fees! Subscribing to knowledge based websites and purchase of books have all kept pace with inflation and sometimes have outrun inflation, thereby disproportionately increasing operating costs. The articled clerks demand nothing less than Rs5,000 per month, some of them protesting deduction of profession tax, which is a legal obligation on the payer! Cost of communication, power, systems, everything has gone up—but the fees remain fixed to 1990 levels!
 

I find that a lot of CAs who were doing very well in terms of monetary value in 1990 to 2000 are not making much money in 2013. Today a good fresher CA gets a CTC of Rs4 lakh to Rs6 lakh (these are among the lucky few) and a CA with 20 years experience in practice is not far off from that figure of income. This leaves quite a bitter taste in the mouth.
 

 Innovate and Evolve
 

We therefore must evolve.  One of the methods of evolution is that we need to find ways and means of working together and increasing revenue. We pool together the resources and the knowledge base. Some of us must develop resources and some of us can develop knowledge base. We can then take up larger assignments in the corporate sector. We have to attune ourselves to the changing economy and business structure. We need get together like-minded professionals and evolve a working relationship which can sustain in long run. We need to develop a bigger brand as well.
 

If one seriously wants to pursue a career as a CA, one will have to assess the focus area of specialisation, whether one wants to go into the industry or practice. Unless the ICAI changes its role, and becomes more of a quality educator rather than an institute which is flooding the market with ‘qualified’ CAs, who do not find jobs, it would be better to look at other career options.

Comments
suketu
1 year ago

Readers shd know there are some CA’s who in the alibi of CA’s are nothing but hard core extortionists repeat hard core extortionists and spoil the good name of CA community.
I had ulitised the CA services of One Vidyut Shah located in Ballard Estate a few yrs ago for my company and personal partners.
In 2018 he suddenly turned very hostile when I questioned him I was not getting any proper reply from his partner one goonda kind of 31 yr old man called Punit Satiya about 25 lakhs pending gst.
Vidyut ,on one hand,tells me based on our billing amount which is very tiny compared to his total turnover he cannot offer better services .
Then he goes on to say that I shd increase my billing with him by utilising 116 other services they give like legal,shares,insurance,business consultancy(he claimed he was responsible for growth of Aarti Industries.I spoke to Aarti Industries MD secretary on 21 Jan 2018 about this and he said he never heard of a man called CA Vidyut Shah and that such people were just using their company name to get business.He also told me a company like Aarti doesnot need any business consultants as owners are experts on how to grow company themselves),etc.He refused to address my problems of GST money not being received and even told me to stop sending written emails in this connection of GST 25 lakhs pending.

He wanted to be my “lawyer’ for my property matter which I never ever mentioned to him) as he kept harping on legal services on and on.He told me one of his partners used contacts from polixce to release one of their clients who had gone to jail for crime within 6 months.Is this service which a CA gives?No .Only if CA is involved in crime will they talk in this fashion.
.He also wanted me to transfer my shares account with my bank to his brokers account so under his instructions ,his broker would not pay me money when I would sell shares.

To top it all he also tel me “Why donot you give me all yr money so you save 33% Income tax.”Only extortionists wl talk in this fashion,

There has been a history of brutal hard core bad words and abuses by him and his partners towards me to intimidate me so I donot change my CA and their criminal game against me continues.I have in record lots of emails and phone called recorded proving what I saying is 100% right.Leave alone thinking of increasing his biling etc I dumped him imm like a garbage can and stopped all dealings with him.Infact he is blacklisted my me and my company.
C.A.Anubhav Arora
2 years ago
I am CA myself and doing practice he is correct as I am doing practice in small town but I know many firms that r earning beyond his thought them r earning in crores per year they r not exceptional but they think differently from him that is why they r earning very much
nagaphani kumar
3 years ago
Doing CA is waste of time and money .ICAI lost its fame and glory.only few praticising CA Are earning more.freshers will face bad situation. But ICAI saying CA are jobless. The future is ahead a fresher CA can available for 5000 per month not article student fresher CA .ICAI Is Interesting in how to get funds and passing more students in entrance exam .But still not loking on salaries of fresher CA and practising charetered accountant
pankaj singh
4 years ago
I agree with ur concern but at same time i concern about what u said that as per ur article u mean there is no life for average person. Wow what a thought u have . LOL
Mr.Aditya
Replied to pankaj singh comment 3 years ago
Frustrated fellow. 4L to 6 L only for lucky fellow. Means CA qualified even not get this salary right?
Ankit Jain
5 years ago
Very well written.. A CA or aspiring CA needs to re evaluate future prospects..
Jay Zaveri
5 years ago
Well then could you please suggest me to some other career options apart from CA .???
Ankur Khabani
6 years ago
I am CA final student & hoping to be a Chartered tomorrow ( result will be declared tomorrow). I agree with the author but at the same time I believe Practice makes man perfect. You cant be knowledge hub within 5 years of span as student. I know that practicing in our field is not that easy but still may be we are considering only one side of the coin. Our field is much wider so our role becomes too. A genuine hard working CA can provide satisfactory services to his clients. Accounting, Auditing VAT, Service tax, TDS, Excise, project reports & what not still opportunities lies in GST. What I think is positive attitude, striving to provide best quality service, patience & dealing with clients in a proper way is what a Practicing Chartered Accountant should do. May be I do not have that much experience than other gentleman who commented do possess still, I am hoping a bright & successful future as a Practicing Chartered Accountant
Ameet Patel
Replied to Ankur Khabani comment 6 years ago
Dear Ankur - its so nice to read your views. I hope that your result has been positive. If yes, all the best for a very rewarding career as a CA. If you have not been able to pass this time, do not lose heart. This is one of the toughest exams in the world and many deserving students have failed in the past. If you ever need any guidance or help, please feel free to contact me.
Prasenjit Sadhukhan
6 years ago
I'm Prasenjit sadhukhan,CA-Finalist, Hooghly-ph-8348353368
Practising TAx consultant.

All comments above are true very much. Personally all we say each other about wrong passing policy & low professional fees in the market. Actually all accept low fees for increasing their client.

all we need to withdraw assignment at low fees.
Sameer
6 years ago
The focus should not be on passing percentage. That is an artificial way to control supply and kill competition. The focus should be on high standards of exam. If there are a 1 crore hardworking brilliant students and all of them clear the exam, then fine make them all CA.
In all professions, there is tendency to make things harder for new entrants just so the existing guys can avoid competition. It is bad for the general public. Even doctors and dentists are trying to shut down new existing medical colleges because more dentists mean more competition. Their argument is the same - new colleges are low quality so shut them down. In reality it is the fear and insecurity of more competition. Everyone wants a fat lifelong paycheck with ease - just like IAS, IPS govt bureacrats.
Vijay
Replied to Sameer comment 6 years ago
Good thought.. I guess u r not a chartered accountant. Else you would have re - thought before posting this.

If the institute really gives a good pass percentage as u suggested, I would challenge 80% of the passout will be jobless or will start looking out outside the profession because of the low pay. And as a cascading effect, no one else in future would want to do CA looking at these low paycheck.
Sameer
6 years ago
Just because CA are finding it hard to land into a plush job, it does not mean that the Institute should pass less CA. That is similar to license raj, monopoly ,cartelization, price fixing, protectionist mindset... etc which are against open free market policies. Let CAs comes out in the market and the good ones and the best ones are making ample of money and plenty of opportunities. Do not try to shrink the supply and kill the competition to preserve the cushy guaranteed income that CA from the past 1990s had. The real bright and intelligent CA will differentiate themselves by coming out of premier undergrad institutes, premier articleships, additional MBA or LLB from premier institutions etc.
Mahavir Kapshe
6 years ago
I think Author is not discouraging anybody, but has put forth the present situation and has also suggested the wayout of evolving into large knowledge based firms.

Factually it is recognised, Indian CAs the best across the world.

Only thing, as Leo Boy has rightly pointed our, we will have to come out of the shell and up date ourselves to the contemporary levels in all aspects.

Not only our country, but the whole world needs Indian Values in Accounting and Assurance services.

Without which sustainable development will remain only a dream.

And yes, ICAI is doing it's best.

And after all, Council Members are elected by members. Do you think they would be able to take a decision which members would normally may not welcome ?

Presently, independence of Auditors is a most burning issue. We have not been still able to tackle it with open mind.

There are too many issues affecting our expertise. And in the present days, expertise is most needed.

Am sure, the things are changing very fast. Individual practitioners are merging for a large firms.

With best wishes to CA Fraternity.
Leo Boy
6 years ago
Well I feel that this is really a discouraging article.

The CA profession has always remained posh and in high swing even at the times when Information Technology was not in their full swing and also in the times when IT has deteriorated.

We should not blame Institute. As Institute is made of only its Member, as the family is made up of Family Member ...

As per lot of views here , the Practice Scenario has gone down Administrator should take some corrective action. I fully disagree with all these people having this view.
Times have changed but the way we work never changed . Times are modern but our ways to work are traditional. One can never expect a growth if we keep working in traditional way. One has to grow with time . In 1990s all the work were manual but no all the work is computerized. IT audits, System Development and lots of other areas has come and we are yet relying on traditional areas..

Are we updated from 1990 to 2013-2015 ?

We expect that we used charge 1000 per hour in 1990 and today we wish to charge Rs 20000 per hour.. But are we equipped for this?

we have to ask ourselves not to Institute , ICAI is doing its job very beautifully. Giving Quality and Technical Education to one all without making any difference in Poor and rich . with If you have it in you just do it kind of attitude.
And we blaming our Institute which is providing all kinds of facilities..

I wish to say to all Members Here and students here please do not fall prey to this kinds of misleading articles as CA profession does not lack in any type of quality.



Balas
7 years ago
Hello Sir,

This article rightly sums up the value of this profession post the qualification. It is thought provoking,

I too wonder why the pass out policies by ICAI have changed without a long term vision by ICAI administrators.

Members passing out in restricted period (i.e pass out percentage low) now stand marginalised with freshers though quality is a question mark.

Business needs change over period of time and is ever evolving, but resulting damage out of policy decision is ever lasting.

May the ICAI administrators re-think through thier policies keeping business needs and find a balancing mechanism.

For those aspiring and fresh CAs, new avenues do exist but need to break ground and see the big picture.

Best Wishes to fresh and aspiring CAs.

Rgds
Balaji Srini, FCA., LL.B

Prasenjit Sadhukhan
Replied to Balas comment 6 years ago
I'm Prasenjit sadhukhan,CA-Finalist, Hooghly-ph-8348353368
Practising TAx consultant.

All comments above are true very much. Personally all we say each other about wrong passing policy & low professional fees in the market. Actually all accept low fees for increasing their client.

all we need to withdraw assignment at low fees.
Kamal Dharewa
7 years ago
Dear Sir,

Don't you think that the scenario has changed now, do you still receive 600 applications a day??


Regards
Kamal
Virendra Sharma
7 years ago
Article is well thought but depressive,the encouraging part is with new government in centre and lots of new projects coming up,the scenario will totally change and it may be a situation where CAs will be less compared to demand.

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