Amarjit Chopra has taken on the Institute of Chartered Accountants of India presidency at a crucial time, with the nation converging with IFRS, moving on from Satyam and working towards increasing global influence. Chopra shares his thoughts about the Indian accounting professions with Carolyn Canham.
The Indian accounting profession has found itself in the international press for the wrong reasons during the past year. The revelation of the nation’s largest-ever corporate fraud at Satyam Computer Services in January 2009 raised questions about issues including auditor oversight and the operation of multinational firms in India.
However, Amarjit Chopra, the new president of the Institute of Chartered Accountants in India (ICAI), is adamant the profession is in good shape. He says in terms of quality it is “second to none”.
Chopra has been a practicing CA for 35 years. He is a partner at the same firm he qualified with and specialises in the accounting and auditing side of the business.
Chopra also has significant leadership experience and taught at Delhi University for more than 20 years. He has served on the ICAI central council for 13 years, chairing the Accounting Standards Board, the Auditing and Assurance Standards Board, the Corporate Laws Committee, the Expert Advisory Committee, the Financial Reporting Review Board, the Committee on Corporate Governance and the Committee on Internal Audit.
He says these leadership roles, culminating in the ICAI presidency, have been his career highlights.
“You get inspired; you want to contribute something to the common cause,” he explains.
Time for a change
Chopra plans to use his time as ICAI president to introduce some changes, particularly revamping the board of studies and improving the examination system to make it more application-orientated. He will also push for the institute to take on some research projects around corporate governance, which he hopes will be of use to the government.
These corporate governance projects relate in part to the Satyam fraud, which Chopra stresses was a wide corporate governance failure.
Chopra is unwilling to comment on the Satyam investigations as the case is before the courts. He simply points out that the ICAI disciplinary committee’s prima farce opinion that two Price Waterhouse firms, four Price Waterhouse Bangalore auditors and two former Satyam Computer Services employees were guilty of professional misconduct was “duly conveyed in the press”, and that the disciplinary proceedings are ongoing.
One of several issues being debated in the wake of the Satyam fraud is the operation of global firms in India. These operations are hazy as the local Partnership Act limits the number of partners a firm can have to 20 and local ethics standards prevent firms from combining their revenue or being publicly represented as affiliated. The global networks therefore offer services through groups of local firms. Chopra says the operation of these firms presents a very difficult question.
“We would definitely like to have a peaceful coexistence with everyone,” he says. “I have always believed that the small and medium practitioners have got their own niche market and the Big Four have got their own niche market.”
Chopra does feel that global organisations must ensure compliance with ethical standards. He himself feels so strongly about the ban against advertising that he does not want the name of his firm printed. He believes the global firms thwart these rules by giving surrogate practices names similar to those of the global networks.
Chopra says that at the very least, the multinational firms should disclose their arrangements with foreign principles, but they are refusing.
He is also concerned the Big Four seem to claim they are “absolutely sacrosanct” and their professional standards are higher than those of small and medium practitioners.
“I am not willing to concede that particular point,” he says.
There has been significant talk in recent years about advocating consolidation among the multitude of small Indian accounting practices as a way to strengthen local practices and help them compete at a global level. An LLP Act, which has been passed by the government, but not yet implemented, could help as it would allow firms to have more than 20 partners.
Chopra is certain consolidation will happen, predicting that in the next five years there will be 50-100 top Indian firms. Chopra can not guess the size of these firms in parameters such as fee income, but he says they will be able to offer a full range of services and may have global presences.
“They may have presence all over the country and be names to be reckoned with,” he says.
Chopra believes the Indian profession as a whole is a “force to be reckoned with”. He points out that India has provided IT services to the world and could do the same with accounting. His one concern is that India does not have the representation it should on international bodies. Just last year, the first Indian board member was appointed to the International Accounting Standards Board (IASB).
“When it comes to the international bodies there is an unfair discrimination against us,” he says. “Looking at the numbers that we have, I think we are not getting [the representation] we should have. Whether this is the IASB, the [International Audit and Assurance Standards Board, the International Federation of Accountants] or the various committees of these bodies, we need a fairer representation than what we have been getting over these years. I think Indian accountants will push their way up.”