A bachelor of commerce degree is the minimum requirement to get your first job as an accountant. A post graduate degree or certificate is helpful for management positions or specialized financial analysis job.
The three most popular professional degrees in India related to accounting, commerce and finance are CA or Chartered Accountancy (by The Institute of Chartered Accountants of India), ICMA or The Cost and Management Accountancy (by The Institute of Cost Accountants of India), and CS or Company Secretaryship (by The Institute of Company Secretaries of India).
As per the prevailing law, only CAs are allowed to sign off on the financial statements of companies. Chartered Accountants are finance professionals who have cleared examinations conducted by the Institute of Chartered Accountants of India, CMAs are finance professionals who have cleared exam conducted by the Institute of Cost Accountants of India, Company Secretaries are finance professionals who have cleared the exam conducted by The Institute of Company Secretaries of India. The CA equivalent is CPA in the US, Cost Accountant equivalent ICMA, CMA granted by IMA (US). For CS there is no US equivalent although UK has ICSA (Institute of Chartered Secretaries and Administrators). There are many memorandum of understandings between these professional institutes in India and global counterparts for reciprocal membership recognition which is in accordance with increased globalization.
Only a CA can perform statutory auditing of an Indian company under the Companies Act, 2013. The sub-section (3) of section 148 of the Companies Act, 2013 separates cost audits from standards applicable for audit of financial records and stipulates cost audit be complied with the cost auditing standards issued by the Institute of Cost Accountants of India. Section 14A and 14AA of the Central Excise Act, 1944, related to special audits leading to detailed investigations on companies, put chartered accountants and cost accountants at par. However, according to an income tax office involved in the preparation of now abandoned draft direct tax code, “Especially in direct tax matters, chartered accountants have always had additional rights.” As per Companies Act 2013, it is mandatory for a company to appoint a full-time company secretary in respect of a certain class of companies. A company secretary is responsible for making sure the company maintains mandatory corporate records, improving corporate governance and compliance.
The path to CA after higher secondary is Common Proficiency Test. (CPT), Three years Articleship / Training under a Practicing Chartered accountant, CA Final. One can appear Chartered Accountancy Final examination during last six months of articleship and pass CA final exams of both groups. CPT registration fee is Rs.6,000 and exam fee Rs.500. IPCC registration fee Rs.9,000 and exam fee Rs.1,600. Articled training registration fee Rs.2,000. Final course registration fee Rs.10,000, and exam fee Rs.2,250. The fee for 100 hours Information Technology Training (ITT) Rs.4,000 and 35 hours orientation programme Rs. 3,000. GMCS-1 fee Rs.5,500 to be undergone during the 1st year of articled training & GMCS-II fee Rs.5,500 after completion of 18 months of training. So, in total it costs Rs. 49,350 (additional cost of books and private tuition excluded). There are also post qualification certificate courses for members like Certificate Course on Enterprise Risk Management, Certificate Course on Concurrent Audit of Banks.
Interestingly, there is now also Accounting Technician Course by ICAI for which one can enrol after Class X. One still needs to appear and pass CPT after completing senior secondary (10+2) before registering for ATC. Complete 8 months of study course, 35 hours orientation course spanning over one week, 100 hours of Information Technology Training (ITT), pass ATE (Group I of Intermediate Exam), complete one-year work experience under chartered accountant. The Accounting Technician Course is a stand-alone course by itself which can also be used as a gateway to becoming a CA.
All the three above said professional institutes now also offer BCom and commerce-related degrees for the enrolled candidates. As per ICAI –IGNOU memorandum of understanding dated March 15, 2007, “IGNOU shall launch a specialized B.Com Course majoring in Accountancy and Finance for the students of chartered accountancy course by which exemption be granted in certain common subjects such that these students can improve their learning process by acquiring knowledge in new areas rather than concentrating in the same subject, which are covered in the theoretical education scheme of the chartered accountancy.” At present, there is also Bharathiar University –ICAI and ICAI- University of Madras Joint Education Programme.
For CMA or degree by The Institute of Cost Accountants of India, the cost of prospectus is Rs.250. The fee structure is Rs.4,000 for Foundation, Rs.20,000 for Intermediate, and Rs.17,000 for Final. For Foundation, there are four papers, Intermediate eight papers, and Final eight. Every student is required to undergo practical training for a period of 3 years on whole time basis to the satisfaction of council.
Just like CA is the flagship course of The Institute of Chartered Accountants of India, but they have standalone program Accounting Technician Course, so is the case with The Institute of Cost Accountants of India whose flagship professional course is CMA but also now have entry-level Certificate in Accounting Technicians (CAT). The students who have passed/appearing 12th (10+2) examination are eligible to take admission in Foundation (Entry Level) Part-I of CAT Course. The course fee is Rs.8,600. There are two groups.: A) Foundation Course (Entry Level) Part-1 with Fundamentals of Financial Accounting, Applied Business and Industrial Laws, Financial Accounting-2, Statutory Compliance; B) Competency Level – Part-II with Fundamentals of Computers, Filling of Statutory Returns, Introduction to Costing Principles and Preparation of Cost Statements, 5-days Orientation Programme. The internship will be for 3 months from organizations prescribed under the scheme. Further, there are one year diploma courses for CMA members like One Year Diploma in Business Valuation and Post Graduate Diploma in Management Accounting.
The student who would like to join the Course after 10+2 pass or equivalent has to undergo three stages to pursue the Company Secretaries Course i.e. Foundation Programme, Executive Programme, Professional Programme. There are 4 papers in CS Foundation Programme, 7 papers divided into 2 modules in CS Executive Programme, and 8 papers divided into 4 modules in CS Professional Programme. Foundation Programme which is of eight months duration can be pursued by 10+2 pass or equivalent students of Arts, Science or Commerce stream (Excluding Fine Arts). Executive Programme can be pursued by a Graduate of all streams except Fine Arts. Fee for enrolment to CS Foundation is Rs.4,500 and examination fee Rs.1,200. For CS Executive Programme, Rs.9,000 for commerce graduates, Rs.12,500 for CPT passed of ICAI /Foundation passed of ICAI-CMA; Rs.10,000 for non commerce graduates, Rs.8,500 for CS Foundation passed students. CS Professional Programme fee is Rs.12,000 and examination fee per module Rs.1,200. Professional Programme can be pursued only after clearing the Executive Programme.
Like The Institute of Chartered Accountants of India, The Institute of Cost Accountants of India and The Institute of Company Secretaries of India have also MOU with IGNOU for students pursuing graduation.
Indian Civil Accounts Service was formed in 1976 as part of reforms in India's public financial management system. The government is in need of trained accountants to look after its departments. For instance, Indian Railway Accounts Service is a Group A central service officers managing the accounts and finance of the Indian Railways. About 10–15 IRAS officers are recruited each year through UPSC Civil Services Examination.
International Financial Reporting Standard (IFRS) is a globally accepted language for presenting accounting reports, making reports comparable globally. The Ministry of Corporate Affairs has committed to converge to IFRS. One can create a niche in IFRS consultancy, personal wealth advisory, planning for college, retirement, estate planning, etc., forensic accounting,, environmental accounting, etc. V skills certificates under Accounting, Banking, and Finance category should be helpful as the idea is to gain exposure and apply in real life setting by demonstrating to your employer or private clients. Prices are low with Rs.4,000 – Rs.4,500 for most of the 42 courses under this category by V skills and admission is open to all. The fee for Certified IFRS Professional certificate course is Rs.6,000.
Knowledge should be open to all. The good news is that there is now an option even for school leavers to excel in the field of accounting and finance pursuing online courses/distance courses like by V skills. These courses are aimed to improve grasp on the subject and may not be always recognized by universities or governments.Four years of professional work experience is all that is required to register for the CFA course, one ofthe most respected and recognized investment management designations in the world!
Preparing sales and cash flow reports, payroll reports, balance sheets, administering billings, managing budgets and inventory, forecasting future income are some of the common duties of an accountant while filing taxes for a company. The first skill required for an accountant is that he or she should feel comfortable crunching numbers, irrespective of the tools in possession from a basic calculator to advanced ERP (Enterprise Resource Planning) software.
Presenting financial reports in an easy-to-understand manner while following Generally Accepted Accounting Principles (GAAP) / International Financial Reporting Standards (IFRS) requires training for which candidates enroll for professional courses including CA and CFA.
An accountant of today should adapt working under relevant accounting software like Intuit (US) or Tally (India). Ability to use Excel worksheets is almost a must. According to payscale.com survey for accountants in India, experience strongly influences pay for this job and the skills that increase pay for this job the most is SAP FICO.
Expertise in data analytics, advanced modeling techniques and SQL are rare to find in accounting professionals. According to a March 2016 joint report Building aTeam to Capitalize on the Promise of Big Data by Robert Half and the Institute of Management Accountants (IMA), among technical skills what is missing the most are identifying key data trends (29 percent), data mining and extraction (28 percent), operational analysis (28 percent), technological acumen (27 percent), statistical modeling and data analysis (27 percent). Those who can integrate these into accounting models can bring a new perspective adding immense value to a business.
The same view is echoed in the article The Top 7 Trends in Management Accounting by Gary Cokins wherein it is mentioned that trend number 2 is about integration. The various components of EPM (Enterprise Project Management) are like gears in a machine – they are interconnected.
The course titled Quantitative Methods for Accounting by RMIT University aims to introduce statistical and quantitative techniques used by business managers to aid in decision-making. According to RMIT, “The focus of this course is the application of statistical and mathematical techniques to problems in accounting and finance.” While making use of Microsoft Excel for the analysis of problems, this course concentrates on the analysis and interpretation of results of statistical testing. It is claimed that this should help accountants use quantitative techniques to help them make better decisions, apply mathematical skills to real life problems, undertake estimation and hypothesis testing using knowledge of probability theory and probability distributions, and analyse and interpret numerical and graphical outputs.
In the article ‘The no. 1 reason small business clients leave’ in AccountingToday, Sue Bosevich, vice president of support at Padgett Business Services, is quoted as saying that citing increased costs is a commonly stated reason, but usually, when you get down to it, it’s the easiest excuse they can come up with. He observes, “Most often, clients leave because there is little correlation between the fee they're paying and the service offered — they simply don’t understand the value they're receiving. Bottom line: it has to be important to them and it's your responsibility to show them that.”
According to the research report titled “Enterprise Performance Management: Not That Popular But Still Bloody Relevant” dated February 22, 2017, “As new technologies make their way into the enterprise world, a core fact remains: organizations still have basic business problems to solve, including budget and sales planning, and financial consolidation and reporting.” The author of this report Jorge Garcia points that financial reporting, performance monitoring, and strategy planning are still crucial for any business when it comes to improving its performance and operational efficiency.
Trend no. 1 in opinion of the article Top 7 Trends in Management Accounting by Gary Cokins is management accounting must help the sales and marketing functions. A company needs to know the best types of customers to retain, grow, win back, and acquire – and those who aren’t.
Soft skills while communicating with customers, colleagues, and other stakeholders is important throughout. This is more so for independent accountants and auditors who need to do their own sales and marketing as well. For them, advise by Howard M. Rosen, CPA, in the article The no. 1 reason small business clients leave by Kali Geldis is small business clients are looking for value and the best way to make a client loyal to you is to expand your services beyond just the one thing that client may come in looking for. Rosen believes that the more services you provide the more loyal the client becomes. Once you are providing three or more services it is very difficult for a client to leave. It is advised to do more than just generating tax returns or financial statements, take on a role of business advisor and not just tax professional. In this context, courses such as Certified Financial Planner should help take in-charge of financial planning aspect of your client as well while providing accounting-related services and make a seamless combination.
The same view is resonated by Gerri Detweiler, head of market education for Nav when she observes that demand for more knowledge around how to help clients manage and build their business credit is huge. According to Gerri, understanding business credit and financing is often complicated and time-consuming and accounting professionals are hungry for information on how to make that process easier. In the same article by Geldis, Sue Bosevich is quoted as saying, “There is software that helps to manage client work internally and to ensure that deadlines are not missed.” He stresses on using apps like Skype for face-to-face meeting with clients.
In India, investors trust a company believing that its financial reports are strictly supervised by The Institute of Chartered Accountants of India or in some cases when it comes to cost audit by The Institute of Cost Accountants of India. But despite this, time and again, there are lapses (like PwC auditors failing to prevent the 2009 Satyam scam wherein auditors could not make out that bank statements presented to them by its founder Ramalinga Raju were forged), calling for a more strict vigilance. As part of tax reforms, GST or goods and services tax is set to be soon implemented in India (tentatively by July 2017). The move will change the way how taxes are levied and existing accountants need to brush up their know-how on GST to stay relevant with the changing times.
For an individual or family, it is pertinent to know how much is spent on overheads like food, home rent, and traveling (taught as part of the home science curriculum, popular among girls to-be-future housewives). For a business house, similar overheads can be catering, office rent, and business travel. The big difference between accounting records kept by an individual or family and a business house is that business house and proprietor of the business house are two distinct entities: money invested by the proprietor is kind of a loan received by the business house (termed capital) from proprietor to be returned back. Otherwise, whether it is accounting for a small internet cafe or a large multinational company, the basic concept remains the same, while denomination changes from bookkeeping to accounting.
Basic knowledge of accounting is helpful to all: housewives, teachers, college students, and freelance professionals. For someone in a job, bookkeeping records help to avail tax rebates available for your income slab. For the money spent on overheads like charity, you can get deductions on annual tax payable by backing your claim with documents. Up-to-date maintenance of accounts by meeting your debts timely helps you in terms of higher credit score. For future needs like buying a new home, investing in a new business, such creditworthiness is crucial. You can get loans for your business or personal needs on better terms from banks and other lending institutions.
In case you are operating a business, maintaining income and expenditure account systematically is almost a necessity irrespective of the scale. For a family-owned business or business in partnership, keeping financial records up-to-date dispels doubt and so appreciated even when there is no legal compulsion. This is important in terms of maintaining goodwill and trust.
Each business house needs to have its accounting records kept as they meet obligations of vivid stakeholders including customers, suppliers, partners, and government (submission of direct and indirect taxes). While most small proprietorship firms accomplish the task themselves, the rest and the larger partnership firms, societies, companies hire trained accountants. The article “Accounting Career Paths” in Monster, a popular job portal, reads, “If money is the language of business, then no one speaks it better than accountants”. According to Lisa Young, a partner at Ernst & Young, "When you come into public accounting, the most exciting thing is what you learn about commerce, the flow of business and understanding business overall.”
One of the most popular technical definitions of accounting is “Accounting is the art of recording, classifying and summarizing in a significant manner and in terms of money, transactions and events, which are, in part at least, of a financial character, and interpreting the result thereof” by The American Institute of Certified Public Accountants (AICPA). There are a number of esteemed universities offering Bachelors, Honors, and Masters courses in Commerce that specialize in finance and accounting. The salary depends on the level of responsibility and the qualification of the accountants starting from bookkeeping clerks (who can be trained in-house with zero qualification or commerce undergraduates) to accounts managers, CFOs or Chief Financial Officers (commerce graduates, professional qualification holders including chartered accountants, cost accountants, company secretaries, MBAs in finance).
It makes sense to go for professional qualifications (CA, ICWA, CS) as there are areas where only qualified professionals are allowed to work. Just like medical profession has bars, so is the case here when it comes to submission of annual reports of listed entities. Unlike other fields like software development where your work speaks, it is not possible to enter into the domain of certain types of auditing related with accounting without a qualification. As per the prevailing law, only CAs are allowed to sign off on the financial statements of companies. Chartered Accountants are finance professionals who have cleared examinations conducted by The Institute of Chartered Accountants of India, Cost Accountants are finance professionals who have cleared exam conducted by The Institute of Cost Accountants of India, Company Secretaries are finance professionals who have cleared the exam conducted by The Institute of Company Secretaries of India.
It is usual and often mandatory for manufacturing industries to hire a qualified cost accountant who takes care of controlling the cost of production. The designation can be cost controller, commercial manager. It is more often a CA who leads the role as finance manager taking care of preparing final accounts for the whole firm. As per Companies Act 2013, it is mandatory for a company to appoint a full-time company secretary in respect of a certain class of companies. A company secretary is responsible for making sure if the company adheres to the legal requirements, improving corporate governance and compliance.
Section 14A and 14AA of the Central Excise Act, 1944, related to special audits leading to detailed investigations on companies, put chartered accountants and cost accountants at par. However, according to an income tax office involved in the preparation of now abandoned draft direct tax code, “Especially in direct tax matters, chartered accountants have always had additional rights.” These CAs have the option to either start their own independent practice usually as auditing firm helping the government meet accounting norms or pursue job. The same goes with the cost accountants and company secretaries whereby cost accountants get involved as independent cost auditor and company secretaries as independent secretarial auditors. Not surprisingly, choosing to start your own auditing firm needs entrepreneurial spirit where failure rate is high.
The recent change in name of ICWAI (The Institute of Cost & Works Accountants of India) to ICAI (The Institute of Cost Accountants of India) in 2011 reflects their desperation to compete with The Institute of Chartered Accountants of India when it comes to lobbying the government for the accounting and auditing jobs. Not far is ICSI which too seeks statutory recognition for undertaking income tax-related work. According to news report dated April 23, 2014, in Business Line, R. Sridharan, President of the Institute of Company Secretaries of India is quoted as saying, “They (ICAI) should not feel we are competition.We should leave it to the market to decide who could do the tax audit work. If we (company secretaries) show competency, then we should also be allowed to doincome tax-related work.”
Also, there are a number of entry-level courses like Certificate in Accounting Technicians (CAT) Courseof one year for 12th (10+2) passed and undergraduates by The Institute of Cost Accountants of India. CAT is claimed to be designed “to equip students to become well versed with the maintenance of accounts, preparation of income tax return, service tax return, filling of return under Companies Act, filling of returns under Income Tax, VAT, Service Tax, Central Excise Custom Act, export & import documentation etc .”
Then there is V skills (A Govt. of India & Govt. of NCT Delhi JV Co.initiative) that hosts a number of courses (41 at the time of writing) under Accounting, Banking & Finance including Certified Business Accountant, Certified Financial Management Professional, Certified Financial Services Marketing Professional, Certified Tally ERP 9 Professional, Certified Wealth Manager, Certified Basel III Professional, Certified Corporate Financial Analyst, Certified Cost Accountant, Certified Financial Investment Professional, Certified GAAP(Generally Accepted Accounting Principles), Professional, Certified IFRS (International Financial Reporting Standards) Professional, Certified GST Professional. Here the charges are nominal starting with 4000 Rs.
A research report by PayScale states that the average salary for an accountant in India is Rs.2,33,899 per year. A Cost Accountant earns an average salary of Rs 448,913 per year, Corporate Secretary earns an average salary of Rs 519,620 per year. The average salary of CAs vary from Rs.3,67,035 for an entry-level CA upto Rs. 1,244,983 as Financial Analyst. Experience and SAP skill (enterprise software) increase their pay.
According to CFA Institute, “Our goal is to motivate and empower the world of finance to become an environment where investor interests come first, markets function at their best, and economies grow. Our Future of Finance work focuses on opportunities for change.” This should be true for any finance professional irrespective of his or her qualification. To conclude, as observed in the article “Career in Accounting” on indiaeducation.net, “Accounting deals with analyzing and summarizing financial records along with auditing and strenuous bookkeeping. It’s really the backbone of any organization so that they know where they’re headed in the financial scheme of things,” which is why “career in accounting holds high potential for a profitable future.”