Freedom brings responsibility... CAs advertise!!

It couldn’t have been a better New Year gift from government for finance professionals. In response to a long-pending plea from chartered accountants (CAs), company secretaries and cost and works accountants the government has finally allowed them to advertise their services.

The ban on advertising was a relic of the past. It made little sense then and makes less sense at a time when financial re-structuring and M&As have become par for the course in India, no less than in developed countries. Agreed, 2007 was a record year for M&A activity — corporate India signed 661 deals valued at $52 billion, a close to three-fold increase over the previous year — and 2008 might see a slight slowdown in activity if the subprime crisis in the US does not get resolved soon.

Nonetheless, what is clear is that as business deals get more and more complex, skilled finance professionals will be needed to structure these deals to best advantage. In such a scenario, the ban on advertisement puts our locally-qualified finance professionals at a huge disadvantage vis-a-vis their overseas counterparts.

While practising company secretaries will be allowed to solicit business right away, professionals in other areas will have to wait for formal clearance by their apex bodies before they follow suit.

However, that is only a formality. For all practical purposes, therefore, finance professionals will no longer have to rely on word of mouth for attracting business but can boldly proclaim their expertise as well as track record. However, greater freedom always comes with greater responsibility.

CAs, for instance, attest the reliability of financial statements that a number of others rely on; government (for tax), investors (for putting in their hard-earned money), banks (for lending), potential employees (for making career choices) and so on.

Thus they have a huge responsibility to uphold professional ethics at all times and ensure that corporate scandals like Enron and WorldCom that brought discredit to the profession do not recur. Apex bodies have a critical role to play in upholding standards. Sadly, these bodies, whether in India or abroad, have not had much success in disciplining errant members.

Economic Times