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March 24, 2022

Know all about Indian Institutes of Accounting and CPA who will be given licence to practise similar to CAs

by Mahesh Mara in Income Tax

Know all about Indian Institutes of Accounting and CPA who will be given licence to practise similar to CAs

The Chairperson of the Standing Committee on Finance having been authorised by the Committee present this Forty-fifth Report on ‘The Chartered Accountants, The Cost And Works Accountants And The Company Secretaries (Amendment) Bill, 2021’

‘The Chartered Accountants, The Cost And Works Accountants And The Company Secretaries (Amendment) Bill, 2021’, introduced in Lok Sabha on 17 December, 2021 was referred to the Committee on 22 December, 2021 for examination and report thereon, by the Speaker, Lok Sabha under Rule 331E of the Rules of Procedure and Conduct of Business in Lok Sabha.

An independent witness submitted the following suggestion: “Establishment of Indian Institutes of Accounting. This proposal is for establishing a string of Indian Institute of Accounting (HA) that will raise the standards of accounting education and offer competition to the Institute of Chartered Accountants of India.

Here’s an outline of what the IIAs would be like:

  • The IIAs will be statutory bodies established by a Central law similar to IITs and Ms.
  • They will be set up in different parts of India.
  • Each IIA will have a board of governors consisting of experts, lay persons, and government officers drawn, among others, from the Ministry of Finance, the Ministry of Education, and the Ministry of Corporate Affairs. The board size will be ten.
  • The board will have full functional, financial and administrative autonomy for its efficient functioning.
  • The chairman and the members will be eminent persons from business, public administration, accountancy, finance, academia, and so on.
  • The board will appoint the chairman and the members and they must be free from conflict of interest of any kind i.e. professional, financial, or personal.
  • The chairman and the members will serve part-time and will have a term of three years. They shall not be eligible for reappointment or extension in order to avoid entrenchment and to bring in new talent regularly.
  • The board will appoint a Director (CEO) for a term of five years. The Director shall not be eligible for reappointment or extension in order to avoid entrenchment. This is particularly important because the board is part-time and the Director could develop deep roots.
  • Each IIA will have an Academic Council that will develop the curriculum. The undergraduate curriculum will have financial and cost accounting, auditing, tax, law, business strategy, organisational behaviour, management, governance and public administration, technology, data science, psychology and other fields relevant to the wide role that accountants play.
  • IIAs will start with a five-year undergraduate programme in accounting. Overtime, they will develop post-graduate programmes in specialized areas such as forensic accounting, business analytics, cyber security, valuation, international tax, and other relevant ‘fields. Once these programmes stabilise, they will develop PhD programmes.
  • Admission will be through a national entrance test after secondary schooling under the National Educational Policy 2020.
  • IIAs will be research-driven. They will support research and publications efforts by their faculty generously,
  • IIAs will work closely with national and regional educational institutions such as the Indian Institutes of Management, the Indian Institutes of Technology, the National Law Universities, and other universities and institutions.
  • From the beginning IIAs will have an international outlook. They should have students from all over the world including from developing countries.
  • They should aim to get the best faculty from around the world.
  • They should price their education reasonably and provide liberal financial aid to needy students. Access, equity, inclusion, diversity, and fairness are important. They should work to raise endowments from industry.
  • Those who qualify in the undergraduate programme will be given two degrees, a Bachelor of Accounting and a Bachelor of Business. This will give them a choice of the stream they want to go into.
  • They will be given a licence to practise similar to CAs. The licence-holders will be called Certified Professional Accountants (CPAs) They will be required to register themselves with a Central Licensing Authority (such as NFRA) which will handle their disciplinary matters.

The proposal visualizes the IIAs as academic institutions that educate licensed professionals similar to AIIMS, PGI, JIPMER, National Law Schools, and so on. In contrast, the Institute of Chartered Accountants of India will be a professional certification agency, much the same way it is now.”

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