CA PROFESSION TOWARDS GREATER OPPORTUNITIES
The economic growth in India is bringing new challenges and opportunities for the profession of Chartered Accountants. The regulations and laws governing Indian corporates and businesses are changing dramatically and significantly to achieve global standards including:
- Introduction of Direct Tax Code Bill to replace the Income Tax Act and Wealth Tax Act.
- Replacement of Excise laws, Service Tax and VAT by the new Goods and Services Tax (GST) law, hopefully by 1st April, 2010.
- Presentation of The Companies Bill 2009 before the Parliament
- Convergence of Accounting Standards with IFRS by 1st April 2011
- A new accounting standard for SME's on the lines of IFRS-SME standard being considered.
- Existing Auditing and Assurance Standards are being fully replaced by new "Standards on Auditing (SA)" on the lines of International Standards.
Besides the above, the services of Chartered Accountants are getting more and more recognition including:
- New opportunities under LLP Act.
- Recognition of Chartered Accountants for Valuation.
- Special Audit under Excise Law
- Audit under Service Tax Law
- Recognition of ICAI qualification in England, Australia,
- Canada and provision of larger international services by developed world.
The aforesaid list is only to name a few. The opportunities in value added services, increasing regulatory compliance's and reliance on Chartered Accountants by all legislations are opening several new doors of professional development which is a matter of great pride for all of us. But it will surely be the harbinger of newer challenges too.
Increasing Challenges
The increasing opportunities are also bringing new challenges including:
- The Chartered Accountants in practice and more particularly small and medium practicing firms are receiving larger number of assignments; but the professional fee being paid by the clients currently is not commensurate to the efforts and quality being put in by the Chartered Accountant Firms.
- The professional CA firms are not able to attract and retain good talent to enable them to meet the increasing expectations of the clients and to harness increasing opportunities.
- Some of the small and medium CA firms have already geared up to strengthen their infrastructure including organisation structure, office premises, computers, software and other facilities. The concept to allocate adequate capital towards infrastructure is still to percolate to the thoughts of all Chartered Accountants in practice.
- Training and up-grading the knowledge and skill for self as well as for articled trainees are becoming complex and demanding, but at the same time inevitable too.
It is important to substantially upgrade the quality of our delivery as Chartered Accountants and at the same time it is important that adequate professional fee is charged by all Chartered Accountants for the professional work being undertaken by them. The cost of meeting essential expense on up-gradation has to be by a corresponding increase in revenues. It may be noted that the economy is growing at a continuous pace of more than 8% for last 6-7 years and is likely to regain the same momentum in foreseeable future. The flow of requirements for professional services is going
to increase further intensively. The number of practicing Chartered Accountant Firms as well as Chartered Accountants in practice has actually reduced by about 20% in last 5 years. This clearly bring out a big demand and supply gap and this can be converted to great opportunity by adequate
planning and strategy by the profession as whole.
We would like to give certain suggestions:
- Be selective of your clients and choose them carefully.
- Be selective about the assignments to be undertaken so as to ensure adequate focus on highly profitable assignments rather than spending quality time invariably on low paying, lowly remunerative assignments.
- Specialize in one focus area besides offering wide services
- Settle the professional fee in advance along with scope of services.
- Regularly raise bills for all services howsoever small it may be. No professional services should be rendered free of cost or at low cost except as a part of the strategy.
- Learn to say ‘NO’ to the clients and the professional work, not meeting our expectations.
- Regularly increase the fee in a moderate manner (15% to 20%) every year or at least every alternate year. In those cases where the fee is very low as compared to the time and efforts involved, a substantial increase should be sought, otherwise we may consider expressing politely and
professionally, our unwillingness to conduct the professional assignment. The clients will definitely
come back in at least 75% of the cases, if our quality is up to their expectations.
The Chartered Accountants in practice and more particularly good CA firms with adequate knowledge and skill are greatly in short supply. We need to rely on our strength as a profession and leverage the same. The Chartered Accountants in practice need to keep pace with Chartered Accountants in industry and the remuneration in industry can act as a benchmark for calculating cost and pricing of our professional services.
Be Competitive
The Indian market is very price sensitive and it is important to ensure reduction in cost of delivery by
using technology and better business processes and by strategizing professional delivery including
using technology tools so that the margin can be increased substantially and we can remain competitive and useful for industry, service sector and other businesses.
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