After my earlier article got a favourable response, I thought of writing a followup, now that we are at the end of 2011, with lots of economic uncertainity ahead. My earlier post focussed mainly on the positives and only alluded briefly to the creative destruction on the profession by the use of technology. This post explores the threats, and the trend of commoditization of professionals.
1. Simplification of laws:-As more laws are revised with simplified procedures, it is a moot question whether the perceived value of professionals will fall.
2. Compliance overdose:-With so many laws/governance/supply chain reviews, companies are increasingly looking out for an integrated compliance/risk management approach. And CAs are by no means the sole competitors out there. The larger companies already prefer in-house.
3. Media campaign ineffective:-Though ICAI projects CAs as trusted business advisors, I doubt that the layperson perceives CAs as anything beyond audit and taxation. Though they may not be ICAIs key audience(that would likely be decision makers and HR), that effect may trickle upwards.
4. Credibility crisis maybe due to media:-The Satyma scam brought brickbats to the profession, and even the lay investor feels that audit reports have lower value. And when the RBI Governor critiques ICAI(/articles/rbi-governor-critiques-icai-on-cpe-rent-seeking-delegates-12186.asp) for tunnel vision and trying to monopolize without innovating, then it is time to read the writing on the wall.
5. Outsourcing of governance via certifications/precertifications:-Be it VAT audits, Central Excise desk review, Special audit of Cenvat Credit/Excise valuations, the trend has been to involve professionals in more stages. Even the 24hrs company registration/allotment of names for companies with filings precertified by professionals, shows the trend. However, the MCA circular about finding junk data in its filings, is a early warning for professionals to perform their work with due diligence, and not to just issue certificates w/o working.
6. Software/Outsourcing eroding the base:-Online preparation of tax returns, legal firms offering tax compliance, manpower supply firms, shared services firms(earlier only intra group but now even for others like Aegis BPO/E-Nxt)-these would reduce the bread and butter service of SME practiontioners.
7. While competing qualifications eating the cream:-MBA, CFA, CRISIL CCAP are just some of the competing qualifications which CAs contend against in the corporate world. And with all alphabet soup of special qualifications like FRM, ISA, CFP, CFE etc, it is doubtful whether ICAIs post graduation qualification will have the same credibility. For top level CFO positions etc, MBA Finance is increasingly taken as per(just read the job ads and you will see)
Of all the above threats, I see reputation crisis and automation as the key ones. Increasingly, the 'well paying' careers are no longer the sole purview of CAs. And when the trend is to have employees learn while on payroll (ICICI-NIIT MBA, CRISIL CCAP etc), the utility of a 3yrs articleship as the sole training format is to be reviewed. Should ICAI follow ICAEW and allow employment experience to be counted as training? These, and the above matters need wider debate, and CAs should not be secure under the 'nation building' brand.