During my last chat on rediff, someone asked the following question :
vic asked: what do u think of chartered accountant career in terms of rewards it carry? kindly suggest
This is what I answered:CA is a good and rewarding career although like in medicine, building a practice from scratch takes time. Of course there is the option of working for someone else -- CAs are in demand in the industry like never before.
KPOs, equity analysis and accounting firms employ a lot of CAs at very good salaries. But remember it can be a very boring profession if you don't like working with numbers. So don't make a choice based only on the job potential!
Half a dozen readers sent in angry emails saying that Chartered Accountancy was a great profession – and that I was projecting a wrong picture. That no profession can be termed as ‘boring’.
Well, I’m afraid I can’t be politically correct and will go out on a limb to say that CA – despite being a respectable profession with great career prospects – has lost out to the MBA. And like it or not, this trend will only grow stronger.
The ABCD of CA
Ask most engineers, why did you do a B.E. and they’ll tell you: "That’s what all bright students who opt for science do.. unless they want to do medicine."
The situation is something similar with CA. ‘That’s what all bright commerce students do.. unless they want to do MBA. ” Of course the situation is a bit different. Even those doing the CA may eventually top it off with an MBA.
The difference between the CA and MBA is a bit like the difference between a 5 day test match and 1 day cricket. Acquiring a CA takes a lot of plodding and perseverance and at the end of the day, a result may prove inconclusive.
The MBA, like one day cricket, is quick, glamorous and performers get faster recognition as stars.
OK, let’s not stretch it. One day or five day – in both cases the players hold a bat and throw a ball. In case of CA and MBA, there is a difference. Both may join the same companies but their job profiles would be completely distinct.
This is not to say that one’s job is ‘superior’ to the other but the fact is that starting as a CA, you can expect to climb up the ladder upto the CFO position. While an MBA’s career path could - in theory – lead upto CEO.
The reason for this is simple : being CEO is about vision and leadership. This would require you – at times – to take a leap of faith, even when the numbers are against you. For example, you diversify into a new area of business. This may mean investing a lot of money, literally burning cash in the initial phase. It may look very bad on the balance sheet for a while, but there is a gameplan and eventually it pays off.
MBAs are exposed to all aspects of the business – their role is to take a birds-eye view of the organisation. On the other hand, CAs, are trained to look at the eye of the fish. And they do a damn good job of it. But should a CA decide to throw down his accounting and auditing arrow and don a different hat, it is not easy.
The mobility into general management and consulting that comes with an MBA from a premier institute is missing for CAs. Even though the CA has battled equally hard – and a rank holder in particular would be one among several thousand aspirants.
So, how do you decide?
Reasons to do a CA include :
1. Dad owns a CA firm, it makes sense to join the business
2. Professional qualification chahiye. CA is a good one – nothing stops you from doing an MBA later.
3. “I genuinely like accounting. It’s what I’ve always dreamt of doing in life.”
As few 17 or 18 year olds know what they want in life, reason 3 is rare. But reasons 1 and 2 are perfectly valid. If lucky, you may find you enjoy the subjects and become an excellent CA. If not so lucky but smart, you may not like what you study but still become a competent CA.
If neither smart nor lucky, you will probably remain a frustrated ‘trying to clear my CA’. The perception is that the CA success story is ‘all or nothing’. Either you clear the exam - rather 3 different exams – or you remain left behind. Whereas in case of MBA, while only a few make it to the top 10 institutes, there is always the hope of the next 10 and then the next 10.
However, things are changing on that front. In a recent interview, Mr T.N. Manoharan, President of ICAI, stated that the pass percentage has risen dramatically in recent years. "Gone are the days when the pass rates were 2-3 per cent. Now, if you consider both groups at the final level, these are at 15-20 per cent. In a single group, it is often as high as 30 per cent"
What’s more, 83 per cent of the 7,445 candidates who passed out in 2005 were absorbed by industries. Out of a total number of 1.3 lakh CA professionals, 10,000 are settled abroad. Of the rest, 55,000 were employed in industries, and the rest were practitioners. ICAI believes there is a requirement of 40,000 more CA professionals in the country.
In fact it does appear that ICAI has woken up and taken the challenge posed by the ‘lure of the MBA’ seriously. A new syllabus will be launched this year and the duration of the course condensed to 4 years. That's still 2 years more than an MBA though!
ICAI is also undertaking marketing itself aggressively. For example, by screening films at schools ‘to sensitise teachers, students and parents to the importance of the profession’.
Most importantly, ICAI has started offering ‘campus placements’. Not only is this great for newly certified students, it’s a good revenue earner for the institute. Like premier MBA institutes, ICAI charges recruiting companies - Rs 1.2 lakhs is the going rate for ‘Day 1’ at the Mumbai and New Delhi centers.
Top recruiters during the February/March interviews were Progeon (which offered 163 jobs), Gecis (160), Tata Sons (68) and Reliance Industries (63). The average salary would be Rs 4 lakhs while the highest salary offered was Rs 12 lakh per annum.
But it didn’t make headline news, unlike IIM salaries...
The basic problem
ICAI can shout itself hoarse over the great new career opportunities the CA brings – and rightly so. But it is impossible to fight the MBA. At best it can hope to attract some of the very bright students who become CAs first and MBAs later.
The very nature of the profession – exacting, detailed and dealing with numbers will put off many students. And there is nothing that anyone can do about it.
That is all I meant when I made my original statement – that CA can be a boring profession. That does not imply that all those who become CAs are either bored – or boring.
But just like you can’t become a doctor if you faint at the sight of blood, you can’t become a C A if your head spins when you look at a balance sheet. Like mine does. Realising this simple truth would save many young people a lot of wasted time and effort.
Karan Johar believes that "shaadi ki buniyaad sirf beinteha mohabbat honi chahiye..." I believe the same applies to one’s career. The only difference is, if you love your profession as much as Abhishek loves Rani Mukerjee in the film – it will lovingly embrace you in return!