CA,CMA,CS AND LL.B (practicing tax laws) can specialize in tax compliances & attestation

CA Dev Kumar Kothari

Earlier related article “Tax Audit in Income-Tax Act-Monopoly of Authority Causing Hurdle for Voluntary Compliance” -was published on 19.05.13 and till 27.07.13 lot of discussions by way of 299 comments and counter comments have taken place on the topic.  Unfortunately, discussions in my view is not healthy and is not expected from any of educated person and not at all from a professional who need team work with other related professionals also.

As per my experience generally CA,CMA,CS AND LL.B (particularly advocates who are tax practioners) –  all are  basically experts and can do related jobs if required to do so. However, some specialization and reservations are order of the day in any society and system.In fact many professionals belonging to the same profession choose to work in particular area. That does not mean that he is no longer suitable for other area of professional work. For example, suppose a CA specializes in tax matters and is not engaged in any audit work for a long period of time and has not say rendered a single audit report or has not verified and attested any document, he can still restart and work for audit- attestation stream of professional work. He may have to re-cap and refresh latest information for audit work.

CA, CWA and CS three courses are wholesome courses on different type of accounting, auditing, laws, general administration and management besides some other subjects. The scope of studies in three courses is similar on about 80 % of total syllabus and difference may be for about 15- 20% of course content if we compare the syllabus. However, basic education is such that after thoroughly studying and passing any one of examination one can command reasonable command on professional subjects of different type of   accounting, auditing and laws.

However, there are difference in emphasis for teaching and evaluating on various subjects and topics within subject. This is due to specific area reserved for different professions. For example, in CA there is relatively more emphasis on financial accounting and audit work whereas in CMA more emphasis is laid on cost and management accounting and cost audit. Likewise in case of CS there is more emphasis on corporate laws, legal compliances and procedural and practical aspects.

I have passed all three examinations and my experience is that all three courses are equally tough and important. In spite of having similar syllabus (about 80%) difference of emphasis on different subjects and topics within subjects, and different aspects of any topic, each course is unique.  Furthermore, in any examination of these courses, the approach of examinee and examiner are also important towards marking in question papers and ultimate result.

So far training is concerned, it is dependent on candidate himself how he trains himself by his own initiative, and urge to learn. Auditing provide lot of scope of learning – theory and practical both if one keep his mind, eyes and ears open and upbeat urge to learn by scope of hard work to learn (instead of , finding scope of enjoyment as a priority) then audit assignments can be big source of learning in lesser time because while auditing you are at receiving end and can get information on various subjects , and laws concerning the client, from so many people and that information can improve your knowledge and experience both. But unfortunately many of audit assistants (particularly trainees) think his job a thankless routine job a mere formality to pass training period somehow and do not take training seriously.

In any profession the basic traits required are basic understanding of core subjects, and capability of understanding similar subject, enlarging and updating knowledge, understanding and practical implementation etc. of knowledge updated from time to time and as and when required.

Therefore, any CA, CWA and CS can with requisite studies, work in different field. For example, even if a very senior CA is required to do cost audit, he will have to have a recap on cost accounting, cost audit and get updated on the same and also about cost accounting and auditing legislations applicable in the case of assignment of cost audit. Likewise, a cost accountant can perform as statutory auditor of company or as auditor for various attestation work under tax laws.  Similar will be case while dealing in legal matters. If a CA, CMA and CS is permitted to appear before High Court, he can do so. To perform better before the court, he will have to recap and refresh (or study new laws) will have to acquaint himself with relevant procedures and practices. Even in case of Civil or Criminal matters, after study, he will be able to represent the case.

In all cases, even routine matters while working on a new assignment one may have to acquaint and update on the related subject and refer books. In case of new type of matters, in beginning one will have to devote more time but he can specialize and do such work.

For example, after each new bill, or new enactment and every year after budget, we hold so many seminars and discussions for understanding changes made.

The art of getting related up to date information and applying the same is important in these days of fast changes.

So far tax audit and other certifications are concerned we need to get updated and equipped to discharge such functions properly. These functions can be done by a CA, CMA ,CS as well as an advocate who is in practice of tax laws. However, because each profession is considered as a special branch of specialization some reservations are in practice. These reservations are getting diluted and many certification work can now be done by CA, CS, and CMA. Lawyers, who are in tax practice, can also do the same but they will have to update and equip for the same.

Much has been said in criticizing manner that accounts of ICAI/ ICWAI (was proposed to be ICMAI but somehow it has been made like ICAI in short) and bar councils etc. are required to be audited by CA. That should not be a ground of criticism. We must understand that this is so because for statutory audits so far CA is regarded as a special branch of professionals so there should not be criticism on this aspect.

Now coming to CA as an expert I will like to ask one simple question as to why CA as an auditor ask his client to obtain legal opinions from advocates, and then he bases his report based on such legal opinion?  Is CA as an auditor not competent to form his own opinion or appraise the reasonableness of views of management and base his report on his own self confidence instead of trying to find out shelter under a legal opinion?

Why many auditors do not even rely on opinion of another CA and insists for legal opinion? Is other CA who specialize on subject is not equally competent as another advocate? Is auditor himself unable to study the subject a bit and find out reasonableness of views expressed by another CA?

Considering discussion which had taken place -is it not a case that CA considers himself as not competent or less competent than an advocate on particular topic?

Or it is just a case simply to save skin of auditor himself as well as another CA to shift responsibility on another advocate?

This shows that as CA ,CMA,CS or advocate one maybe expert in general manner, however when a matter of specialization come  we have to depend on  recognized experts , on particular subject, like advocates as well.

We  all professionals  and professional bodies must try to get jobs or assignments based on our merits and capabilities and not only due to legal requirements. There must be more efforts toward the goal of improving capabilities instead of getting statutory protection and statutory functions.

I recall my interview during November 1982 after I had passed ICWAI final with merit in June 1982, and  had appeared for CA final all groups in November 1982 and was undergoing postal coaching for CS. The interviewer asked me why I am trying for another professional degree of CS?

 My answer was CS course though similar to CA and CWA is still unique in its approach and emphasis, many things which I did not study in CA and CWA I read while answering postal coaching question papers.

On asking of special subjects of interest and my specialization, my answer was that I am not specialist in any subject but I can assure that I can specialize in any of subjects within a reasonable time required to specialize.

Now I feel that I was correct at that time and I am correct now also. I hope this apply to any educated professional candidate that he can specialize on any of his related subject within a reasonable time if he has capability of reading, understanding, getting information and applying knowledge. This can be for all core subjects studied during courses.

I remember that even after completing ICWA course, and having appeared in CA final, I committed a blunder by using a wrong form during December 1982.  My assistant an experienced clerk was kind enough to inform me “sir, few years back I used and some another    form, did I made a mistake?

Then we saw latest Rules and found that the clerk had used and filed correct form and I committed a mistake. We also noticed that there has been some changes in form since the clerk filed old form. I thanked the clerk and also informed this aspect to the MD of company who appreciated my recognition of my own mistake and learning from a clerk as well. He also recognized experience and courage of the clerk who discussed the matter with me, and prompted process of rechecking and updating which avoided a blunder to took place.  The reason is clear enough, during  CA training I did not came across filing of particular form and there was not much emphasis on procedures and compliance in courses of ICWAI and ICAI. The course of ICSI filled that blank.

About results of CA, CWA and CS- as stated earlier three courses are wholesome courses and are equally tough. One of major reason for low pass percentage is casual approach while appearing in examination without adequate preparation and this is due to (a) two examination sessions in a year and (b) no bar on  number of appearance in examination and (c) giving more importance to work and less importance to studies.

My Principal  honorable CA Shri Mahabir Prasad Kedia  had passed all examinations of  CA and CWA  almost simultaneously with B.Com (Hons.) and he had to wait to get membership of institute because he was below the minimum prescribed age of 21 years for membership.  We need to remember that in those days pass percentage was less than 1% for all groups at a time.

Now-a-days due to  lesser emphasis of students as well as their parents on practical training,  better availability of information and guidance, more coaching facilities, CA made easy coaching etc. we find that generally students are only concerned about passing examination and training is considered an un-necessary formality – promoting most unfortunate aspect of CA- dummy article ship . As a result we find pass percentage and also percentage of marks obtained much higher than what was 20-30 years ago.

On taxguru itself – news dated 01.04.2013 link :  https://taxguru.in/chartered-accountant/delhi-girl-ca-cost-accountant-cs-23.html    I found that a Delhi University commerce graduate, Pallavi Sachdeva , 23 years,  passed CA, CWA and CS courses. On this news Siddharth Gupta said on :

April 10, 2013 at 3:00 PM  “congrats….but I completed CA, CS and ICWA at age of 22 in year 2013”

On that news keshav said:

April 4, 2013 at 12:44 PM

I think we can do only a single course along with CA, How did you manage it all the three?

This is really a question to be asked on morality. How Pallavi did three additional courses with CA when ICAI permits only one course to be undertaken with CA?

This is clear enough that in order to achieve her goals she may have said good bye to laws, rules and regulations with approach who care?

Had I did the same perhaps I could also complete three courses at the same time or even simultaneously with B.Com at age of about 20-21 years.

seeni thirumaran said  on April 2, 2013 at 9:02 PM said

“Congratulations to Pallavi Sachdeva on your wonderful achievement. Go for CIVIL SERVICES EXAMINATION and uplift the downtrodden. All the very best.”

This message shows that how people think about commitment to a course. A suggestion to go for civil services,  to a very fortunate  candidate (without having met her I am not sure whether Pallavi is brilliant or not?)  who has completed CA,CS, and CWA , is really unfortunate way of thinking. I must say that this shows state of undecided mind why such a candidate should go for civil services – the answer is clear – to make lot of money without much risk and efforts.

This sort of thinking is causing brain drain- people after completing Engineering go for MBA- that can be okay if the candidate later manages operations in field in which he did engineering. However, after completing such courses people join marketing activities and that too like products of banking and  securities.

I remember , after I passed Higher Secondary Examination  (11^th class at that time) one of my elderly neighbor ( a Railway Officer)  advised me to (a) start preparation for civil services, he guided me also (b) B.Com in first call with 60% or 70% will be considered equally in civil services  so just try for first class (c) some check (means fat cash box) and jack (means recommendation of politicians) will be required to get selected and appointed at lucrative post in Civil Services  (d) then you can make lot of money.

After hearing about check and jack, I thanked him but  with due respect I told that  it will not be possible for me to bribe to get a service and make lot of money in that service.   The effect of his advise was that I stopped reading “Competition success Review”  magazine although  I had subscribed after passing  Board Examination of 10^th.  I thought, if I will be prepared for Civil Service Examination, I may be lured to appear and pass the same and then greed may come in my matured mind. To avoid that I stopped even initial  preparation for service examinations. But now I think I was a fool and I am still a fool – because I do  not think only about making money.

CA vis a vis LL.B

During seventies and eighties CA was considered toughest course in India and LL.B as easiest. Even in case of collegiate course of LL.B it was mostly taken as a private degree course. The thinking was just read some guess books, answer banks, last few years question- answers, etc.  appear in examination and get degree of LLB. Any graduate could join LL.B. This has really popularized LL.B course for part-timers but has a reason to tarnished image of LL.B to a great extent. In fact at some time I also joined LL.B but considering casual approach by most of students I did not appear in examination and left the course. Thank god this situation did not last for very long, and now course has improved its image.

LL.B course may still be easier, but gaining success is very difficult and one has to do hard work to learn vast area of laws.

Conclusion:

I think we must respect each qualification and mastery on any matter. We must recognize even knowledge acquired in professional courses just as  foundation  and  tools of  further learning, However, in changed times professionals must be allowed  to advertise their  expertise and services and also marketing of services. This will enable loud and honest marketing and avoid chpke –chupke  marketing of professional services which is a fact of life and is done by most of professionals except few fools like me.

However, I have strong feeling that CMA and CS can also be brought into category and meaning of “accountant” under various tax laws at least in relation to work of checking, verification and authentication and rendering report about compilation and accuracy of information contained in report and expressing an opinion thereon.

I hope I have expressed my views and tried not to hurt sentiments of any one. If still anyone feels hurt, please get into logic before getting annoyed- annoyance is not good for health and relations.

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