Posted on Monday, October 8, 2018
In a country of 125 crore citizens and 6.8 crore taxpayers in 2017-18, close to 3 lakh chartered accountants (CA) serve as the finance guides. As of April 2018, there are only 2.82 lakh CAs in India, and out of which only 1.25 lakh members are in full-time practice that makes approx. 44% of the total strength.
The CAs support in tax compliance thereby liaising with government authorities, representing companies in courts, ensuring smooth business operations by taking over the complex tax compliance section. Their job ranges from auditing, financial planning, tax planning, wealth management, making tax strategies, income tax statements and more. From corporates to small business, CAs are hired to assist in transaction from old tax laws to the newer ones. The Institute of Chartered Accountants of India emblem with a Garuda in the centre and a quotation from the Kathopanishad: Ya esa suptesu jagarti, “One who is awake among those who are asleep”, says it all about the relevance of chartered accountants in India in the contemporary times. Many firms rely on CA to develop skills for technical accounting, research, presentation, critical thinking on the basis of their understanding of the dynamics of business.
The demand for chartered accountants in India has been on a rise. This is mainly because more businesses are being established and the government has been making policies and regulations to monitor the market. As of March 2018, over 1.03 crore taxpayers have registered in GST regime. However, there are not many professionals to guide these taxpayers.
There is an immediate need to tap the talent and skill them in advanced tax calculations. Training in Artificial Intelligence to participate in the growing automation of auditing process is needed.
“Since the GST is a new law, which combines various laws into singular legislation and requires periodical compliances and interpretation, the need for CAs will increase rather than decrease,” said Sandeep Shah, partner, NA Shah Associates LLP.
The demand is not just because of the change in the economy, but also because of the crucial job roles that CAs have been catering to, for instance, Internal Audit, Tax Audit, Tax Planning, Cost Planning, Due Diligence, Audit under various State and Central Legislatures, Government Audit, Management Audit etc. Around 98 lakh businesses were registered under the GST regime, and every business requires a professional to manage the accounts related matters. “Under GST regime all the taxpayers whose annual turnover is above Rs 2 crore, will require to have GST audit carried out by CAs”, added Shah.
LACK OF PROFESSIONALS
India produces a big number of engineers and doctors, despite the fact that there are no jobs for the skilled students. But, even after having a long-term scope of professional security, the accounting sector faces a crunch of trained professionals.
“The recent push and incentives being provided for startups, where students get full-control of their businesses, is another reason for why Commerce students are looking beyond Chartered Accountancy,” said Pooja Dhingra, assistant professor, Shri Ram College of Commerce (SRCC).
The struggle during the exams and low stipends at the entry level job, limited job opportunities are some of the reasons that have put students away from pursuing the professional field of chartered accountancy. “The crisis here is that demand is ever increasing, but the supply is not at par because the salaries are not satisfactory. There are no efforts to match the ever-increasing demand of CA professionals,” said Raghav Bhargava, director, Taxmann.
The problem also lies in the curriculum which largely is theoretical and not in sync with the industry requirement. “The rigorous practical exposure during the course of study is missing which makes most of the CA feel that they are not ready for the corporate world,” added Bhargava.
“One of the major problems, which still exist, is that the CA curriculum is designed keeping in mind the requirement of the businesses based out of metros, but the requirement is different in tier II and tier III cities, so the students should have knowledge irrespective of the cities,” said Shah. However, frequent changes in syllabus are not possible as several students who fail to clear one of the groups, will face the challenge of studying revised syllabus while reappearing for exams.
LOW PASS PERCENTAGE
While there is no glamour associated with CA as a career and low pass percentage is yet another reason that the number of professionals is low. The pass percentage for May 2018 final CA exams was recorded as 14% for students appeared under new syllabus, while it was 17.48% for students who appeared under old syllabus.
“Due to the challenging nature of CA industry, vast syllabus and absence of strong formal setup of classes, there is high dropout rate which leads to low pass percentage in calculations,” said Himanshu Kathuria, a final year CA student.
“ICAI has a uniform level of scaling as per the demand. The number of students passing the CA exams depends on the demand calculating through ICAI’s survey. Moreover, there is no formal setup for CA education, and students are dependent on coaching centres. Aspirants from tier II and tier III cities have limited chances to qualify the CA entrance exams because quality coaching is not available,” says a taxation manager at one of the ‘Big Four’ accounting organisations, on condition of anonymity.
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