Monday, August 14, 2006


The profession of Chartered Accountants, as practicing professionals has been one of the most important and fast growing profession, contributing significantly to the nation building and economic growth. The dynamics of change in economic and business environment over the past few years in
significantly visible that has brought in newer and newer challenges before the profession, specially to small and medium size firms of Chartered Accountants.

  • The professional opportunities and the areas of work for which the services of Chartered Accountants are being utilized by the business and the society are increasing rapidly, whereas the small and medium size firms are not able to get an adequate share of the upcoming opportunities, rightly deserved by such firms.
  • The regulatory requirements and statutory compliance to be undertaken on behalf of various clients are increasing with great pace, making it fairly complex, time consuming and resulting into relatively higher costs for providing various professional services.
  • The plethora of filing various returns, for example, under TDS law, Fringe Benefit Tax, Service Tax, VAT, Companies Act, Capital Markets regulatory framework and other regulatory requirements are increasing. The Government has increased the regulatory compliance burden on the businesses, very significantly. Government need to simplify these requirements and to increase periodicity of filing. The bureaucratic and regulatory intervention in the businesses has to be brought down in a systematic manner.
  • The technological up gradation, more particularly, electronic filing of Company Law Returns, Income Tax Returns (now even corporate income tax returns are to be mandatorily filed electronically) as well as Excise Duty Returns and others demand immediate skill up gradation and frequent up dation, which proves strenuous specially among senior members in the profession.
  • Availability of skilled human resources to undertake various complex assignments in a time bound manner is a major issue. Availability of articled trainees has already reduced drastically, in view of the revised scheme implemented with effect from October, 2001. Even in terms of the newly revised scheme to be implemented from 1st September, 2006, unless the Institute take adequate steps to check dummy training, the inflow of article trainees will continue to be an issue. The availability of qualified Chartered Accountants to work with small and medium size firms has reduced significantly due to ample opportunities and demands from industrial and services sector including BPOs, where an average salary of Rs. 6 lakhs plus per annum is being offered to newly qualified Chartered Accountants. This phenomenon has resulted into lower influx of fresh enrollments in the past. For vibrant growth of the profession in the current phase of economic growth, it is imperative that regular young blood flows in the profession. We need to portray the opportunities available to attract the talent towards our noble profession to make it grow. 
  • The Chartered Accountants, joining the practicing profession have reduced significantly, as only 15% of the Chartered Accountants qualifying in last 2 years have obtained Certificate of Practice from ICAI, balance opting to be employed.
  • The clients are becoming more and more demanding in view of rising businesses complexities, increasing geographical spread and larger size of business. The clients expect expert knowledge, timely delivery and solution to a wide variety of issues under one roof. In the absence of a separate specialist's availability in various areas, the professional delivery becomes more complex and provide lower margins to the smaller practicing firms.
  • The increasing number of Accounting Standards, Auditing Standards, Statements and Guidance Note being issued by the Institute though a laudable step has made the job of practicing professionals still more complex. Efforts are to be made to provide various requirements in a more simple and a lucid manner to enable Indian Chartered Accountants to easily understand and comply with the same.
  • The recent directive of the Hon'ble Supreme Court requiring Chartered Accountant Firms to mandatory operate from commercial locations, except in cases of very small firms operating from their residences, has further increased the capital cost and operating cost of Chartered Accountants. For example, in a place like Delhi most of the commercial centres are available beyond Rs. 8000 per sq.ft. as capital cost, with increased expenses on office maintenance, parking, conveyance and electricity. A number of CA firms will have to shift their offices within next few months to ensure continuation of their services. The heavy capital and recurring costs is a big issue to be addressed by all small and medium size firms. A similar requirement in other parts of the country cannot be ruled out considering active judiciary. 
  • The decision of the government to dismantle RBI empanelment system for bank branch audit as well as Central Statutory Audit has brought another threat for the professionals to their independence and opportunities. 
  • The discrimination in relation to service tax on most of the services being rendered by the other professionals and corporates, has resulted in higher costs for the service provided by our profession. Competitive edge therefore is lost in favour of other service providers. 

The practicing chartered accountants community is getting geared up to face all the aforesaid challenges and All India Chartered Accountants' Society stand committed to provide them necessary 
support. The current challenges are to be met on a war footing basis, in a united manner. The latest concept of networking, merger and corporate form of practice provide only some strength and avenues to meet the new challenges. Consistent economic growth of 8% per annum has brought a large number of new opportunities for all of us as practicing professionals and we need to systematically plan our affairs in a manner so as to fully reap the benefit of the growth. The demand 
and supply pendulum is increasingly becoming positive in our favour and now it is up to us to leverage it to the societal expectations. This will be a recipe for achieving new glorious heights. The
opportunities are not only increasing nationally but also internationally.Reaping the maximum individual long term benefit out of increasing responsibilities is a professional challenge. Together we will win. The imagination, innovation and capabilities of our fellow brethren are immense and we shall be too glad if you take time out to share your ideas with us. we may be reached at "Team AICAS". E-mail,


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