The new president of the Institute of Chartered Accountants of India, G Ramaswamy, has introduced several initiatives in a bid to boost the skills of chartered accountants and enhance India’s economic development. Swati Prasad reports.
Strong growth in the Indian economy is unleashing a plethora of opportunities for chartered accounts. The new head of the Institute of Chartered Accountant of India (ICAI), G Ramaswamy, has set in motion a host of initiatives so that chartered accountants (CAs) are better equipped to seize opportunities.
In an exclusive interview, he explains why he would like accountants in India to become entrepreneurs and his plans to put India firmly on the global map.
Swati Prasad (SP): What is your vision for the Indian accountancy profession?
G Ramaswamy (GR): India is growing at a fast pace. The government has several e-government initiatives. Financial inclusion is going to be a key growth area in India. This will enable free flow of funds into the remotest villages of India. The equity market is all set to boom.
The new Companies Act will be here soon. The biggest taxation reform in India – the goods and service tax – should also come into effect soon.
The direct tax code will come into effect next year, so the future of the profession looks great. Accountants can play a greater role in the economic development of this country.
SP: Is India delaying the date of implementation of Ind-AS (Indian Accounting Standards converged with International Financial Reporting Standards) accounting standards?
GR: The ICAI has sent the converged Indian Accounting Standards to NACAS for further processing.
The Ministry of Corporate Affairs will implement the IFRS converged Indian Accounting Standards in a phased manner after various issues including tax-related issues are resolved with the concerned departments. The date of implementation of the Ind-AS will be notified by the Ministry at a later date.
We have given our inputs regarding these tax issues. In our view, there is still time to resolve these tax issues. The companies that have to adopt Ind-AS from the coming financial year will file their tax returns only after March 31, 2012.
SP: How important is the new Companies Bill to the accountancy profession?
GR: We hope the new Companies Bill is passed soon. This is a very important bill. The Companies Bill 2009 seeks to replace a half-a-century-old Act. It surely promises greater shareholder democracy and stricter corporate governance norms.
The provisions relating to rotation of auditors, changes required in corporate law due to IFRS implementation, recognition of auditing standards in the Bill, the new role of the National Advisory Committee on Accounting and Auditing Standards (NACAAS) and also Limited Liability Partnership (included in Bill) are some of the matters which are definitely important and significant to the CA profession.
The new Bill proposes to open up new avenues for professionals, especially chartered accountants.
SP: What role will information technology play in achieving your vision of globalisation of Indian accountants?
GR: The profession should play a greater role in building the nation. We need to train our members in IT. Without IT knowledge, it’s very difficult to realise all the opportunities.
Developing an IT infrastructure is very high on my agenda. We have previously launched ‘Project Parivartan’ – an initiative that takes a comprehensive 360-degree view of the existing processes, and benchmarks them with the global best practices across the world.
Under the project we are undertaking the following:
- setting up a student and member management system which contains the details of all the students and members across the country;
- an online grievance management system that will allow the student/member to log an online complaint with the ICAI helpdesk and receive the updates on the mobile phone through a unique tracking ID;
- an e-learning portal to help students/members take up online learning and/or share quick comments and enable a comprehensive learning programme; and
- an online library to serve as an online tool for exploring various course books.
My dream is to see Indian CAs have a multinational presence. The outsourcing opportunity for accountants in India should be much like the opportunities before information technology professionals.
SP: Is the institute taking any steps to increase the use of XBRL by companies and the government?
GR: The Institute has incorporated a company under Section 25 of the Companies Act, 1956, for managing the affairs of Indian jurisdiction of XBRL – XBRL India.
The XBRL India jurisdiction recognises the role of regulators (such as Reserve Bank of India [RBI], Securities and Exchange Board of India, Insurance Regulatory Development Authority, Ministry of Corporate Affairs, etc) who are also the key potential users of XBRL and therefore play a very important role to develop XBRL in India.
The RBI has already initiated XBRL filings for its internal reporting from the banks and has been involved in the development of banking taxonomy. The Ministry of Corporate Affairs (MCA) has been considering mandating filing of financial statements in XBRL format by companies in a phased manner.
The Institute has been involved in implementation of XBRL by being a member of the Committee set up by MCA for this purpose.
SP: What are some of the key issues facing the profession that you are keen to address?
GR: The biggest issue before the institute is globalisation of Indian accountants. India is growing at a rapid pace. A lot of FDI is coming into the country, Indian companies are setting up offices abroad, acquiring firms overseas and merging in order to grow bigger and go global. In light of these developments, it’s important that Indian accountants also globalise.
In order to achieve that, we have tied up with many accounting institutes. For instance, recently, we signed a memorandum of understanding with the Canadian Institute of Chartered Accountants (CICA). We are working on a similar agreement with the New Zealand Institute of Chartered Accountants.
Soon after taking charge, I released an action plan for the institute. Our goal primarily will be to uphold public confidence in the ICAI and to create global chartered accountants by inculcating best international practices in them.
In short, we want to bring ICAI to the forefront of economic activity. I would like to concentrate our efforts in creating a unique ICAI brand that would be recognised and treated with respect all over the world, not just in India.
As part of our international initiatives, I would like strategic collaborations with more international accounting bodies in order to provide a global outlook to our members.
SP: Your predecessors laid a lot of emphasis on capacity building. How would you take this agenda forward?
GR: We would continue to focus on capacity building of small and medium practitioners. We want to strengthen our members through capacity building and skill development initiatives. We want to change their mindset towards the changing world; they must learn new things.
We plan to provide support to small firms through our website where we plan to put up details of small and medium size firms – what they specialise in, their contact details, names of partners, etc.
The ICAI is addressing the conceptual and implementation issues at the firm level, popularising the concept of merger in order to enhance the capacity of the firms and reviewing the concept of networking in the context of current rules and procedures.
We are also suggesting ways and means to carry forward consolidation and networking as well as the corporate form of practice by way of encouraging collaboration with the professionals and experts in the relevant fields.
We also plan to hold conferences and conclaves where the smaller firms come in contact with the bigger ones. These conferences would serve as a platform for networking. We will also encourage larger firms to handhold small audit firms.
Another way to encourage smaller practitioners is through frequent and focused interactive meetings with CFOs, CEOs and internal auditors to understand and address contemporary issues and needs.
We are helping our members upgrade their skills. For instance, we have entered into tie-ups with universities that give exemptions to CAs who wish to do an MBA. Ultimately, we want chartered accountants to become entrepreneurs.
SP: What steps are you taking to ensure that India is able to create more CAs each year?
GR: We are addressing education in a number of ways. We also want to focus on continuous education. We also want to get rid of the impression that it’s tough to become a chartered accountant. The ICAI plans to achieve both these objectives through virtual classrooms and training programmes. We would be launching more study centres soon by providing infrastructure to all branches.
As of today, application forms for enrolling for chartered accountancy are available at certified registration centres. We are launching student registration centres. Through these centres, students across the country can register themselves for the chartered accountancy course by simply walking into the offices of established chartered accountants.
We are doing brand building, career counselling, coordinating with universities and colleges to understand the commerce stream.
We are also promoting research and encouraging CAs to do a PHD. We are also planning to start an ICAI channel as well as Web TV to provide support to both our members and students towards continuing professional education.
SP: What are some of the key initiatives you have undertaken since you took charge earlier this year?
GR: We have set up four important committees over the last month: the Committee for Members in Entrepreneurship and Public Services, Public Interest Advisory Committee, IFRS Implementation Committee and Committee for Cooperatives and NGOs.
All these four committees will address some key issues. For instance, the committee on cooperatives and NGOs will look at a uniform accounting standard for the cooperative and NGO sector. Through the committee on IFRS, we want to involve a large number of CAs in the implementation of IFRS across the country.
IFRS throws open ample opportunities for CAs in India and we want our members to seize such opportunities. We have already entered into an agreement with the IFRS Council of Japan for outsourcing of accounting work. We are exploring similar opportunities in Singapore and Australia.
The Public Interest Advisory Committee seeks to understand the needs of the public and its requirements with reference to our profession. It will also extend professional advice to the government, corporations and the common man.
The committee will identify proper projects with regard to corporate social responsibility and advise companies on implementing projects in the interest of society.
The Committee for Members in Entrepreneurship and Public Services will take care of the members in business and trade, who, in large numbers, have acquired professional skills following the standard set by the ICAI and doing their own business in service, manufacturing and trade sector. This committee will guide them in moving forward in business.
The committee will also take care of our members who are working in the judiciary and other government departments.