It was during Independence of our country that the Government of India started recognising the importance of certain specific professions and roles. This happened as the Government needed the expertise for aiding them in their activities and also aiding the growing industrialization. Colonialism played the catalyst for the same. As more companies sprung up, laws came into being and so did law bearers.
As each profession was identified it also became important for The Government to enact separate laws and set up bodies for governing the professions.
Below you can see the journey of how the 3 professions were recognized by the government, came into being and went on to be governed by statutory bodies.
1. CA (Chartered Accountancy)
- When the Companies Act, 1913 was passed, companies required to maintain several books. It also required appointing a qualified auditor to audit such records. That gave rise to the qualification of Chartered Accountancy.
- In the 1930s a board ‘Indian Accountancy Board’ was established to govern the qualification of auditors.
- On 1st July 1949, Chartered accountancy act, 1949 was enacted and Institute of Chartered Accountants of India was established as a statutory body to regulate the profession of chartered accountants.
The ICAI registers around a lakh students a year and around ten thousand students qualify as chartered accountants every year.
ICAI is the only body which governs and regulates the profession of Chartered Accountants in India. It has 3 lakh members currently (December 2020)
2. CMA (Cost and Management Accountancy)
- The end of world war II provided a foundation for the growth of the profession as they were aiding the Government in policy formulations. That gave rise to the qualification Cost and Management Accountancy (erstwhile cost and works accountancy)
- In 1944 Institute of cost and works accountants of India was established as a registered company to regulate the profession.
- On 28th May 1959, Cost and works accountants act, 1959 was enacted and Institute of Cost Accountants of India (erstwhile Institute of Cost and Works Accountants of India) was established as a statutory body.
The ICAI registers around 50,000 students a year and around two thousand students qualify as chartered accountants every year
*ICAI (Cost) is the only body which governs and regulates the profession of Cost and Management Accountants in India. It has 5 lakh students and 70,000 members currently (December 2020)
3. CS (Company Secretary)
- The professional body was established to be a global leader in promoting good corporate governance.
- On 4th October 1968, Institute of Company Secretary of India was set up as a Section 25 company under Companies Act, 1956, to regulate the profession and members.
- In 1980, Company Secretary Act, 1980 was enacted and on 1st January 1981 Institute of Company Secretary of India was established as a statutory body.
ICSI is the only body which governs and regulates the profession of Company Secretary in India. It has 3.5 lakhs students and 62,000 members currently (December 2020)
Now, let’s know more about each profession.
Chartered Accountant as a Professional
1. Specialized in finance and accounts
2. Responsible in performing financial audits of companies and signing the audit report. Also in performing government audits.
3. Responsible for aiding the organization in financial decision making.
4. Also handles direct taxation, indirect taxation and internal audits.
Cost and Management Accountant as a Professional
1. Specialized in cost accounting and management accounting
2. Responsible for conducting cost audits of companies and signing the cost audit report.
3. Responsible for aiding the organization in critical decision making of overall cost efficiency, pricing, budgeting, input-output flow and strategy formulation.
4. Also handles direct taxation, indirect taxation and internal audits.
Company secretary as a Professional
1. Specialized in corporate law, securities law and other laws.
2. Responsible for signing board reports and conducting board meetings of companies.
3. Responsible for all legal compliances of an organization.
Each profession has its role in an organization for it to conduct activities and succeed. A successful organization will have in-house expertise in each of the above profession – rather it is a necessity. Each professional is working towards economy building and nation-building.
Chartered Accountancy as a course
1. Studies varied subjects such as taxation, finance, accountancy, audit etc.
2. More importance is given to finance and accounting subjects.
3. Exams contain case study model questions as well.
4. Requires 3 year training period between the intermediate level and final level.
Cost and Management Accountancy as a course
1. Studies varied subjects such as taxation, finance, accountancy, audit etc.
2. More importance is given to indirect taxation, direct taxation and cost accounting subjects.
3. Exams contain case study model questions as well.
4. Requires completion of 3 year training period after the final level.
Company secretaryship as course
1. Studies varied subjects such as corporate laws, securities law, contract acts, accounting etc.
2. More importance is given to laws.
3. Contains options to complete a 3/2/1 year training period during or after the course completion.
It is now clear that each profession throws light on specific subjects and areas. Each profession works on its core areas.
I would urge the readers to understand another important aspect that we miss out - the fact that the 3 professions are unique but at the same time go hand in hand at an organizational level and at a national level. Think about this, financial expertise without legal compliance? Or legal compliances without costing and pricing decision making?
The expertise of all 3 professionals is required for an organization to ensure complete compliance and efficient operations.
Why don’t we as professionals walk along with fellow professionals from other institutes and aid each other in performing their activities? Why don’t we also be a part of the growth of the other professions? Why don’t we shout out respect to each leading the society to have a respectable eye to this unison of professionals? Why don’t we begin by creating a harmonious relationship with each other?
The author is a Co-founder, Proprietor - KaizenEdu | Educator | Career counsellor
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