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Its a habit of mine to read speeches by RBI Governor/Dy Governors to glean some insights into their way of thinking, and also generally to know what issues are generally concerning the economy. And while reading the RBI Governor's speech on Challenges to the Accounting Profession Some Reflections as an inaugural speech (, I was not disappointed. The Governor faintly praised the ICAIs efforts in helping the RBI perform its regulatory role, but remarked that

1. Continuing professional education cannot be a mere ‘tick in the box’ or determined by participation in number of hours of education or training, but should be evaluated by way of outcomes - upgradation of relevant knowledge and skill sets.

2. Needless to say, the process of selection of persons for representing the Institute in international forums should be strictly meritocratic and transparent.

3. So far, you have enjoyed a monopoly position in respect of certain areas of work, for example, the audit of financial statements. The easy way out to seek and expand opportunities would be to agitate for continuation of this monopoly position. I believe this will be a mistake. Rather, the profession needs to identify emerging opportunities in the market place and develop the skill needed to exploit them.

4. It makes much more sense for the profession to sharpen its skills in the area of concurrent audit for which a need exists than to agitate for retention of work which does not add value. Similarly, the profession has shied away from the responsibility for prevention and early detection of fraud. The need for such a service exists and if the profession does not fulfill that need, other agencies which can provide this service will displace auditors and deprive them of a potentially expanding opportunity.  This statement was given in the context of reducing branch audits for PSU banks, which ICAI has opposed.

All these points are valid, and ones where the institute has been lacking. My views on them are :

1. I have blogged earlier about how the CPE hours system is gamed, or backloaded towards year end to meet the mandatory commitments. While WIRC/ICAI have been trying their best to persuade members to spread the attendance evenly instead of only in December, I do not think the efforts are much good. And as long as the practising members view these CPE sessions as a place for good food and networking, things will not change.

2. Regarding the process of selecting people for forums like IASB/IFAC etc, ICAIs representatives have been invariably Past Presidents/leaders of the profession. But is there anything wrong in advertising the vacancy transparently, so that those interested can apply? Such a process would be more transparent than the back door lobbying which may be otherwise suspected.

3. About seeking more opportunities for its growing members, well that is what ANY professional association is bound to do in the interest of its members, whether or not it be in the public interest. Why else do ICAI office bearers meet the new entrants of MCA(secretary/minister) soon after change? Why else has ICAI pushed for accrual accounting and public accounting reforms?

4. I would say ICAI lost the first wave of opportunities in investment banking/corporate finance to MBAs, and now is in fear of losing it to programs like CRISIL CCAP/ICICI-NIIT MBA-which substitute full time professional education for on the job training.

To be fair, ICAI has been introducing certificate courses and training at a rapid pace, and also educating members about different career opportunities. But if such an eminent personality like the RBI Governor has such an impression about ICAI, then maybe we should speed up the process of change, and demonstrate tangible value addition in the services where we do not have monopoly. I would welcome comments from esteemed members on this topic, in a constructive light.

It is better to hear the warning signals now, than wake up when the danger is at the door when it would be too late.

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