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A very typical situation which articleship poses in front of every chartered accountancy student is the vertical or field in which he/she should do articleship.  Although, this kind of situation is generally faced when one is doing articleship from a large firms which includes BIG4s, Grant Thornton, BMR Advisors, BDO etc, the same cannot be fully negated even for medium and small firms.

Irrespective of the firm’s size, what is important for a trainee before he/she joins any firm is the awareness of every vertical, be it audit or tax or accounting. Each vertical within an organisation behaves and acts very typically, which is a function of the kind of work handled by each team.  In this article I have tried to broadly highlight what’s in store for you when you join a CA firm.

Before I talk about the various verticals and the pros and cons of each of them, I would like to share with you my experience of articleship. I started my articleship in the year 1999 from a firm called RSM & Co (which later merged with PwC in 2006). It was a great Indian firm, quite big in size and having big multinational companies as its clients. When I went from my first interview, the HR head asked me a question, which came as an absolute surprise to me.  He asked – “Nimish which department do you want to join and do your articleship from – audit or tax?”.  I had absolutely no clue of this question because at that time (year 1999), majority of the students had not known that articleship could also be done in taxation.  Since RSM had a big tax practice, they offered articleships in tax as well.  But as a true CA student with absolutely no guidance from anyone, I thought in my mind - “Who does articleship in tax, what kind of irrelevant question is this guy asking”.  Since I had no clue, very proudly and confidently I said ‘audit’ thinking as if my answer would really impress him.  But he obviously knew that I had no idea about taxation.  And then later I realised how these two division works, wht kind of work they offer and what are the career opportunities in each of them.

AUDIT

The audit function is generally divided into two verticals:

1. Statutory Audit

2. Internal Audit, which is also known as “Risk Advisory”

What’s in Statutory Audit

The word ‘audit’ became quite infamous after the famous ‘Satyam scandal’ which shattered the corporate world with corporate frauds.  The auditors were blamed for being unable to unearth the fraudulent activities running in the company, ultimately leading to a financial nightmare for Satyam’s shareholders.  This would give you an idea of what audit is all about.  As an Auditor you are expected to closely check the financial activities and provide an opinion on the correctness of such financial statements.

The statutory auditor’s role is extremely important as he is the person who is answerable to equity shareholders and other stake holders in an organisation.  Each and every stake holder looks upto the auditor with great respect since he is the person who identifies gaps, loop-holes and any frauds that happen in an organisation. After all, if the shareholders have invested money in an organisation, they have all the rights to ensure their money is in safe hands and the auditor is the main person who is instrumental in ensuring this for the shareholders and other stakeholders.

As au auditor, you would be expected to visit the client’s office and scrutinise the books of accounts in detail to check the transactions reflect a true and fair view of the affairs of the Company. Preparing audit schedules, trial balances, P&L and Balance Sheets would form the major component of your training.   Audit involves lot of travelling as you would be expected to travel to clients place. 

You would be surrounded with numbers, numbers and numbers whilst training in the audit vertical. 

Learning Outcomes – Statutory Audit

After undergoing training in Statutory Audit, you can reasonable expect yourself to be abreast with the latest audit tools, audit methodologies and processes.  As an audit professional, you would not only know how to prepare financial statements including profit & loss account and balance sheet, but also how to audit them and identify the gaps and loop-holes.  As an audit professional you would have a working knowledge of Accounting Standards and Auditing Standards which are applicable to companies and which Companies use in preparing their financial statements.  You can also be aware of the corporate law provisions applicable to companies and some working knowledge on tax and regulatory provisions as well.  This is because as an auditor, you would be expected to review each and every transaction from a holistic perspective and not just from an accounting perspective.

What’s in Internal Audit/ Risk Advisory

As the name suggests, internal audit or risk advisory practice (as it is commonly known as now-a-days) is done for the internal management of the company to ensure that all the internal controls and processes are in place and consequently, the company is able to mamage its risks well.  The internal auditors generally suggest practices and processes which help companis decrease their costs and complexities, improve performance and protect their assets.  These services come in various forms such as contract risk services, enterprise risk services, establishing internal controls, compliance risks and regulatory services etc etc.

Learning Outcomes – Internal Audit/ Risk Advisory

As part of the internal audit/ risk advisory team, you would be given opportunity to work on internal controls of an organisation.You would learn the tools and techniques which help organisations establish strong internal controls, fraud detection tools and creating an eco system to manage risks, be it organisational or transactional.  An internal auditor is the management’s blue-eued boy because he is the person who ensures a complete risk free environment in the organisation which ultimately help give comfort to statutiry auditors, eventually leading to increase in confidence of the stakeholders.

TAXATION     

What’s in It: Taxation is by far the most sought after field by fresh chartered accountants purely due to its dynamic nature and a perceived glorified value. Taxation is a vast area and is one of the biggest practice areas for chartered accountancy consulting firms.  BIG4s very large component of revenue is derived from taxation.

Taxation includes variety of taxes including corporate tax, indirect tax, international tax, transfer pricing and expatriate tax.  Each vertical offers a highly challenging and dynamic area to practice as every aspect of tax involves interpretation of law, number crunching and a high level of business analytical skills.

Students who are interested in pursuing a career which involves tax advisory, tax structuring, tax litigation should look out for options in tax. 

Learning Outcomes: Taxation develops legal interpretation skills, number crunching skills and also helps in developing good business acumen.  A good tax professional is able to analyse various business scenarios and advice options which are helpful for companies to structure their tax obligations.            

Having said the above, what is important to know that every vertical has got tremendous potential to work or practice. Articleship is the golden period and one should not waste time, but make the most out of it.

In my subsequent articles I would delve into each of these verticals in greater detail so that you are able to assess and make a well informed decision.  I would also talk about the career opportunities you get after you have decided to choose either of the verticals.

Good luck…

Authored by Nimish Goel, a qualified chartered accountant who’s passion is to coach young chartered accountants and aspiring students achieve the best in their life.  Nimish used to work with EY and PwC in India and has also worked with KPMG in Europe.  He now runs his own consulting company and runs a blog www.nimishgoel.com.  He can be reached for any queries and issues on his blog.  

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