Interesting Question to All CA's., Becoming CA's

Well lets think about the story of explosion in trade and commerce. When businesses used to be small and limited in scope, a single person could have managed to put in his savings and start a business.

Then, as usual some curious men started to look beyond what was easily visible and they planed to explore. And in due course, with multi directional exploration , not limited only to geography but also to the realm of abstraction.

With geographical exploration they identified new people new cultures new opportunities and with the explorations in mind they created both physical as well as abstract structures to get more and more.

So with new geographies they got new markets and increased business and with new abstractions, they developed the brilliant legal concept of limited liability.

Now public at large can contribute small sums to create a pool with which business could be carried out at greater scope and reach.

But then how to govern the decision making authorities who have control over this massive pool of capital. The public at large cannot be invited to create a Athenian democracy in which all decision is to be polled by the whole public.

So, human imagination had already invented indirect democracy under which you elect people who then decide on your behalf. So another super structure of Corporate Structure, where Board of Directors elected by general shareholders have the power to make capital allocation decisions.

So far so good in good old Honestistan. But somehow someone realised that if i am honest and you are honest then we both deserve reward in direct proportion of our effort.

But haa, we are humans, i want to get ahead with the rest and so i want to use every perverse means to get a bigger pie. So can i get to use the whole pool of money (in which my contribution is limited) as per my whims and fancies. After all Corporate Governance and limited liability saves my ass if anything goes wrong.

So, the interest of the Board of Directors and general shareholders align only in theoretical text books. Its just like any corrupt politicians having nothing to do with the well being of its constituency. This is called Agency Problem, by the way.

OK.. so these were the problems. Huge money moves between businesses and companies. How to safeguard the interest of the investors. How to know what the management is saying is true or not. 

How do we solve this ? after all huge public money is involved. 

Cannot opine on the veracity of management's claims but still can take an expert opinion on the truthfulness and fairness of the financial statement prepared by them. 

So here at this point, the role of CA towards the society at large becomes evident. 

May be in day to day matters an accountant or a student of accountancy may be at a loss to define his role. but if one takes a broader perspective, its role becomes really prominent.

In fact, it's only because of the organism called CA and the functions he can perform in safeguarding innocent public money by providing them the opportunity for informed decision making, the expansion of trade and commerce has been possible.

But may be he himself is not really aware about his true big picture role to the society.

Sorry if i bored you guys, but may be this helps to clarify your role and the real purpose of your existence to a layman.

Will look forward for further fruitful discussion.