And now, an 'Indian CPA'

The CPA is to America what the CA is to India. The highest and most prestigious qualification in the accounting profession.

Neither the CPA nor the CA is a 'degree'. It is a designation or statutory title awarded to those who pass an exam set by a particular professional body. In the US that body is the American Institute of Certified Public Accountants and in India it is the Institute of Chartered Accountants in India (ICAI).

In short, although there is no CA college or CPA college these designations are brands in their own right. And so I was surprised to see an ad on the front page of several newspapers advertising the 'CPA'. The ad states:

'The CPA Council is responsible for the CPA program and regulation of the CPA profession'

A footnote also declares that:

'The ICFAI University Tripura is mandated by law to offer the CPA program and confer the CPA designation. DAT, CPA and Certified Public Accountant are registered trademarks'.

Yes, but whose? I do not know the intricacies of the law - perhaps it is possible to register any trademark in India as long as the foreign trademark holder has not filed for it yet. But what if the American CPA Institute - which is in existence since 1896 - objects?

There were smalltimers who registered trademarks like Pizza Hut, before it entered India, who were forced to shut shop later.

But even if it is legal for you to register a trademark like CPA because the American CPA institute does not care to enter India or object, it is still ETHICALLY wrong.

This is sad because the intent behind the new course is good. There is growing interest in the CA profession but all aspirants cannot and will not pass the exam. On the other hand there is a growing demand from companies large and small for competent accountants - not necessarily CAs. Just smart people with knowledge of accounting.

ICAI itself has decided to start a new course that will create 'accounting technicians'.

There are also private institutes like Institute of Computer Accountants who run courses which create 'Certified Industrial Accountants'.

But no, ICFAI could not think of ANY other acronym for its course...

And it is a mere coincidence that they also have a course called CFA.

Which has nothing to do with the CFA awarded by the CFA Institute headquartered in Charlottesville, Virginia offering the CFA exam since 1963. The one which has 83,000 members in 129 countries and is highly valued in the investment banking and finance communities.

Now courts have been deliberating over this Phoren CFA vs Indian CFA question for years. Sometimes they tilt this way and sometimes that. The end result is that students are confused although the finance community knows its apples from its oranges.

As Piyul Mukerjee notes in her blog:

I-Banks such as Accenture, Lehman Brothers, E & Y give a far different weightage to who they see as the actual CFA charter holder - a crazily tough place to get into and then get through its exams, where even chartered accountants and IIT engineers are known to fail - as versus these tom-tomming media and space hoggers. God knows if the Tripura one is at all entertained by the international finance institutions. It would be interesting to see how these two CFAs measure up against each other, in -say - a third exam.

It may not even be necessary to make this comparison - the Indian CFA may well have its merits. But why use the same acronym and always be seen as a wannabe?

It's the same story all over again with the 'Indian CPA'. You can go ahead and do the course but be warned it will NOT be recognised or have value in the US of A. It is not that CPA.

I'm sure ICFAI is willing to fight another round of court battles, if necessary. They may even win on paper... but in the quest to be seen as a serious academic institution they have lost already.

Dress code for CAs?

DNA reports:

The Institute of Chartered Accountants (ICAI), a statutory body for regulating chartered accountants in the country, has tied up with retail major Provogue to provide a dash of colour and style to the profession.

“A professional should be identified by his knowledge, garb and panache. I believe the new dress code — blue blazer and tie — will give chartered accountants a new identity,” said president of ICAI Sunil Talati.

A well intentioned but poor idea. Doctors wear white coats and lawyers may don black ones. But, they work in specific work settings like hospitals and courtrooms. By ICAI's own estimation 75,000 of the 1.4 lakh CAs registered with the body work in industry. ie. regular corporate office. Can you imagine them wearing 'uniform'??

The remaining 65,000 must be in private practice. But here too, a blue blazer and tie is not going to help 'market the brand'.

A dress code is merely cosmetic, it cannot solve an overall identity crisis.

I have nothing against CAs, despite what you may think after reading this piece.. I do believe however that the MBA has impacted the CA profession. CAs have more 'core skills' but in a world where showmanship, branding, soft skills and a macro view seem to matter more, the CA loses out.

The acid test of a professional's worth is: do I get the last word? If a doctor scribbles out medicine X, you take it. If a lawyer advises defence Y, that's what is argued in court. If you don't agree you can go to another doctor or lawyer. But whichever you finally gets to be the expert. You have to trust him or her.

With a CA, what happens. He advises. The client may or may not agree. Or even believe he knows better. CAs are manipulated or coerced into signing audits they know are false. Inflating or deflating figures. And so on and so forth.

And this is not just in India. As the Financial Times noted after the Enron scandal:

Over the past five decades, accountants have changed from watchdogs to advocates and salespersons. Auditing has become one of a number of services, including consulting and tax advice, in which accountants "sell" creative tax avoidance and financing structures.

No doubt black sheep exist in medicine and law as well but there the regulatory body when it comes to accounting is particularly weak. I have not heard of CAs being 'unchartered' for malpractice. If it does happen, it's an event so rare and invisible that no one is afraid when signing off on doctored audit reports.

Again, not to suggest MBAs are highly ethical but that's a separate story.

As a core skills profession, bound by a charter, CAs need to live up to high standards to regain their rightful place in the sun. And then, they won't need those ties and blazers...

Terribly unsuitable for Indian weather in any case!