CAclubindia welcomes you all. We are here with our New ICAI President CA. K. Raghu.
A worthy combination of youth, dynamism, experience and excellence, CA. K Raghu has taken over as the supreme torch-bearer of Indian accountancy profession as the President of the Institute of Chartered Accountants of India (ICAI) for the year 2014-15. An information technology maven, regarded as a role model and mentor of the Next Generation Chartered Accountants with more than 23 years of impeccable professional standing, he is the second person from Karnataka to hold this position.
He is widely known for his pioneering and far-reaching initiatives of webcasting, e-learning and ICAI Web TV. He specialises in Taxation, Business and Technology Consulting. Sociable, warm & supportive- CA. K Raghu is also widely respected as an inspirational motivator. His motto for the year 2014-15 is: Moving Towards New Frontiers.
CAclubindia welcomes you and congratulates you on behalf of the whole CA community.
What are the changes that can be expected in the CA course in the coming times? Do you forsee the inclusion of any off-beat subject, such as soft skills, entrepreneurship or any other advanced computer applications, etc. in the CA course?
Basically, what we are looking at is: we are trying to see the course curriculum that we are currently having. We revise it once in 5 years. Last time we revised the curriculum in 2007. The Council has recently taken a decision to revise the curriculum. We have recently set up a committee to review the education & training and we propose to change the curriculum to suit the current requirements of the industry. As you know, India is a happening economy and we see lot of new sectors coming up, we have seen the emergence of the retail sector, infrastructure, telecom sector and also various other sectors like IT. So, as the industry grows, as the economy grows, there is a need for chartered accountants who are able to perform to their expectations and we believe that yes, there is a need for us to review the curriculum. We have set up a new committee called as CRET. Very shortly, this committee will go into the need for change in the curriculum. We will have views coming from all the stakeholders, the students community, the members community and am very helpful that by the end of this year, we will have a new curriculum placed.
ICAI is a very respected institution and it has stood the test of times. Where does the greatest strength of the Institute lie? Are there any challenges? And how is ICAI handling them?
The ICAI, as we know, is the second largest accounting regulator in this world. Today, we have more than 2 lakh 40 thousand CAs and 10 lakh students. I think this is the biggest strength that the institute is having. We have more than 143 branches across the country. We are presenting 22 foreign countries i.e we have 22 foreign chapters and ours is one big family of CA students. I think our strength comes in from the membership, from the student community and the fact that the professionals are popular, I feel personally that yes that CA course will become more and more popular and will have more and more young generation students joining the CA course.
E-learning and e-library is the changing need of the education system and we see that ICAI is also changing with times. What are your strategies to evolve with the changing education system?
A few years back, the ICAI under the auspices of IT launched the e-learning courses which is a big success, currently. We have more than 10 e-learning courses which are extremely popular. We plan to continue our initiative in developing more and more e-learning courses for the benefit of the membership. We feel that as an organisation, we have to leverage on technology so that we are able to offer these e-learning courses to the members who can spread across the country. Yes, we do have a plan this year to set up a digital library and this digital library will be the first of its kind to that the members across the country would be provided a login. They could access the entire information that is available on the digital library and that will help them to offer quality services to their clients and if they are working in the industry, then they will be able to get lot of resources that will help them to discharge their duties effectively as a member in the industry. So, we see a big change that would happen in the near future- the members of our profession getting empowered with the knowledge resources that we are having in the institute. And towards this, recently, we have dedicated a knowledge portal for the benefit of membership. We have launched it on 12th Feb, 2014 and this knowledge portal would be the first step in trying to provide resources to the members at their doorsteps and I would urge all the CA friends to view this. Visit our knowledge portal and give us your feedback so that we can make it more useful and informative.
In this era of gloomy economic outlook, what role can Indian CAs play?
I feel that the CAs have a very important role to play in the growth and development of the economy. In fact, the CAs are called as the partners in nation building. We are working closely with the Ministry of Finance, with the Ministry of corporate affairs, with all the apex regulators in the RBI, SEBI, IRDA to see that how best, we as a professional organisation, can help the Govt. and the regulators to bring about a change in the economy. As, I told you, India is a happening economy and in a happening economy when so many things are happening around, the kind of development what we are seeing, we will see a big role for the CA community and as a profession, we are completely geared up for the challenges that are there in the economy and we are very confident, we will be able to support the Government in all their initiatives and hope that we are able to build a strong nation.
Where do you think our Indian CAs stand among other CAs around the world?
I think the Indian CAs are the most sort-after CAs, when you go around the world, when you travel globally when you interact with the CEOs from the top corporates around the world, they say that the Indian CAs are the best in the world and in fact, if we go to a place like Dubai, more than 1500 CAs are working in Dubai; in a place like Abu Dhabi about 7000 CAs and in the entire gulf region more than 8000 CAs were working there and we believe that the Indian CAs are considered to be best in the world. This is the feedback that we have received when we have interacted with the topmost corporates around the world, that is because of the quality of education, the examination system, the rigorous training what we impart in our curriculum that make the Indian CAs the best in the world.
ICAI has been constantly formulating new Accounting Standards as well as revising the existing Accounting Standards from time to time with the objective to bring the Indian Accounting Standards in line with the International Accounting Standards (IASs)/ International Financial Report Standards (IFRSs). Sir, how far have we come or I would rather say how near are we to our target?
The ICAI is the apex body for formulating standards in India, we have the AS Board that formulates the AS that are required for the country and I am very happy to say that India as a country has decided to converge with the IFRS. Globally, more than 140 countries have adopted IFRS in preparation of Financial Statements. The Council has taken a decision: yes, we also have to align ourselves with what is happening globally and we are extremely delighted to inform the viewers that we are completely ready with the Indian version of the IFRS known as IASs. These standards have gone through a robust standards setting process. They have been formulated with the IAS Board. They have been approved by the Council and also approved by NACCAS. Same has also been hosted on the website of the Ministry of Corporate Affairs. The only thing that is pending is the date of implementation. The Government, we have given to understand that is waiting for the New Co. Act to be fully operational. Once, the New Companies Act comes into place, I am sure the IFRS would be made applicable, at least to a certain segment of companies because we have given a roadmap to the Ministry of Corporate Affairs stating that yes, IFRS should be made applicable in phases. In the first phase, all companies having a net worth of more than 1000 crores should adopt IFRS is what we have set. Only thing I can say is that our members are completely geared up for this challenge. We have rolled up the Certification course on IFRS for more than 10,000 CAs those are passing certification course and we are very confident that we are completely prepared for this IFRS Regime and we would like to state that as an institute, we have an important role to play to see that the IFRS implementation in India is a big success.
You shared some concerns with Ministry over New Companies Act 2013. Can you enlighten us on these concerns and what is Ministrie's feedback on that?
1. One is the Constitution of National Financial Reporting Authority, we have made a representation with the Ministry of Corporate Affairs stating that some of the current functions of the Institute and the proposed function of the National Financial Reporting Authority is common. We have said that yes, there should not be duplicity of work happening in both NFRA and Institute; we have made a suggestion to them that yes, if they are able to look into this, there cannot be duplicity of work happening in both NFRA and the Institute. The Ministry has assured us that they would look into it positively.
2. Reporting of Frauds under the New Co. Act: A lot of challenge is there in the profession and members today are supposed to report on the frauds happening in the company, by the management and on the frauds happening on the company by external sources. So, we as an accounting regulator are aware of the fact that our responsibilities have been increased. We have planned to give guidance to the members and we are very confident that once we give guidance to the members we will try to define what exactly are the areas or framework wherein our members should report, as far as fraud is concerned. This will help the members to report frauds to the expectations of what the New Companies Act says.
3. And thirdly, when it comes to Audit Rotation, we have said that Audit Rotation should happen only in case of large size entities and it should not be applicable to small companies like Private Ltd. Companies and one-person Companies. We have also said that the caps in the number of audits should also be received only to the large size companies and not a small private limited company. The Ministry has said that they will be looking into the suggestions given by us.
4. And finally, we have said that penalties and prosecutions are very high. We have also made a decision that there can be some sort of relaxation given on the penalties and prosecutions as this is something new and we as an accounting regulator would like to see how much we are able to support the members, handhold the members in implementing this New Co. Act.
Are you in favour of NFRA? Dont you think this will bring more transparency? What are your concerns over multiplicity of regulators?
Basically, one of the activities what has been proposed in NFRA is that the AS and the auditing standards that has been formulated by the Institute is given to NFRA. NFRA would renew these standards that have been prepared by the Institute and notify it. Currently, instead of NFRA, NACCAS is seeing it. So, there is not much change happening in the formulation of accounting standards. As far as disciplinary mechanism is considered, the entire disciplinary mechanism today is being handled by the Institute. What is being proposed in NFRA is certain segment of disciplinary proceedings against members who are involved in large size accounting fraud would be looked at by NFRA for which, as I told you, we have made a representation. Other than these, we have also expressed our concern on Audit Rotation and cap on the number of audits. As, I told you that the Ministry is quite positive and we are sure that we will be able to get some relief from the Ministry.
ICAI is focusing on women empowerment what are the major steps you have taken for that.
As you all know that I have been elected as the President of ICAI on 12th of this February, 2014 and every President has an action plan for the year. This year, I have decided that being a young leader myself, I need to focus on the young members' empowerment. We have a lot of activities. We have set up a new committee called as 'Young Member Empowerment Committee', where we will try to understand the needs, aspirations of the younger members who are qualifying, because 50% of our members more than 1 lakh 20 thousand CAs today are below the age group of 35. Their needs are different, their aspirations are different and we have mapped all their concerns and we would like to provide the kind of support what is required for them so that they are able to take on the new changes that are taking place. That is why, we have kept the theme as Moving Towards New Frontiers because we find that the next generation CAs have a very important role to play in moving towards new frontiers because today we have lot of new legislations coming in like the Direct Tax Code, Companies Act, IFRS. There are a lot of opportunities for our members not only in India but also globally. So, we want to say that as an Institute, we are completely prepared to lead the profession in new direction where our professionals can offer their services and towards this, we have also set up a women empowerment committee because 22% of our members are women members and we feel that we need to support them, guide them and see how best we are able to make them excel in their professional work and these two committees i.e the 'Women Empowerment Committee' and 'Young Members Empowerment Committee' would specially focus on these segments and try to support them and handhold them and I am sure that this initiative that we have taken up this year would be a successful initiative and the members at large would appreciate the lead taken by the Institute on this.
What is the reason of this low passing percentage of CA exams? Is this an area of concern or good for the profession?
The CA Course has been one of the toughest courses all along if you compare it with Engineering / Medical Courses. One thing is that entry is easy but exit is tough. And the pass percentage ofcourse, last time for the CA Final was about 3.4% and our examination is one of the toughest in the country and a very robust examination system is what we have in place. We believe that yes, if our profession has to be recognised, if the society has to value our profession, we need to have the best examination we want to ensure that the students who are passing out of the CA examinations are world class professionals, that is our intention, we absolutely have no intention of trying to reduce our percentage. We want to ensure that only the top performers pass out of this examination because when we come out as CA, we want to ensure that the CA who is coming out of the CA Institute is one of the best accounting professionals in the world.
What ICAI is doing to protect small practitioners from big MNC firms?
As you know that India is the country having full of small and medium practitioners, we have a small and medium practitioners committee that look into the empowerment of the SMPs. We are providing them with the Accounting s/w, billing s/w, we are providing them with XBRL s/w, auditing s/ws. We are also giving them concessional insurance, we are also tied up with national banks to provide them financial support for setting up offices, many initiatives have been planned for the SMPs; we want to build their capacity, we want to see how best as an institute we can support them so that they are able to compete with the bigger firms and I am very confident that the SMP firms in India are doing extremely well and you can find that when you interact with them, some of the top professionals are SMPs.
What is the next action plan and what would be the focus of ICAI?
This is my Action Plan for the year 2014-15 Moving Towards New Frontiers, as I told you that we would like to be responsive. The world around us is changing the economy is growing fast. India is a happening economy and we would like to give a message to the society at large that the ICAI is aware of the changes that is taking place around us. We are completely geared up, our members are completely geared up for the changes taking place around the economy and we would like to assure the Government, the stakeholders and the society at large that the professional is responsive and dynamic and is working towards the changing needs of the society. Towards this, we have come forward with this action plan with 2 areas of strategic focus. I am sure that this particular action plan what we have choked up for the current year will be able to take the profession to greater heights.
Sir you are a role model for every aspiring CA and Professional, do you have any message for CAclubindia members?
My message to the CA community is that the Chartered Accountants are looked upon with high esteem in the profession; the world looks at the Indian CAs with great respect, the Government, the regulators everyone have high expectations from the CA community, I think each one of us have an important role to play; we are of course, a big family of 2 lakh 40 thousand CAs and all of us should see how best we can bring about a change in how a CA is looked upon, how best we can innovate, how best we can add value to the whole economy. All of us together as a big family of 2 lakh 40 thousand CAs, if we can contribute to the growth and development of the economy, I think we will be seeing a progressive India a India that will be admired around the world and I am sure our members will be able to contribute towards this and we as an Institute are completely geared up to handhold and support the members in making this change. Thank you!!!
It was really good talking to you, thanks for your time to CAclubindia.com and once again many congratulations to you. We wish you all the very best for your tenure.
Thank you very much, I am sure the members of CAclubindia would be helping us with our initiatives and we look forward for your active participation and if you have any suggestions or feedback you can mail to me at HYPERLINK "mailto:email@example.com" firstname.lastname@example.org. I am also available on FACEBOOK you can just post a message and we will be very happy to get your feedback. For us, your feedback & participation is very important. And with this I would like to wish all the viewers of CAclubindia a great future and I can just assure them that yes we are here to work along with you and we look forward for your active participation, thank you all.