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Accounting Profession: The Past Year was a good one

Asish K Bhattacharyya 

The year 2009 was turned bad for the auditing and accounting profession due to the Satyam episode.

Although there was spill over, the year 2010 for the accounting profession was overall a very good year. The Institute of Chartered Accountants of India (ICAI) could complete its task of formulating new set of accounting standards, which are fully convergent with IFRS. There was no serious allegation against the Chartered Accountancy profession. Job opportunities for young chartered accountants were plenty. The Institute of Cost and Works Accountants (ICWAI) has also done a commendable job of issuing a significant number of cost acco-unting standards. It could improve its image in the public eye. We may hope that the year 2011 will be an excellent year for the accounting profession.

The present decade is challenging for the profession. India’s long-term growth prospect is encouraging but with a larger uncertainty band ahead. India can grow at 8 per cent or more. Conventional time series methods based on past data suggest a potential growth rate of 7.5-8 per cent for the Indian economy. However, the issue is how India can move to a 10 per cent growth trajectory ahead. We need to grow by 10 per cent for the next 20 years. Moreover, there is a need to achieve inclusive growth. Economists’ forecasts show that China and India will account for half of global growth from 2010-2020.

Economists are grappling with growth and development models. It is difficult to establish definitively which factors lead to economic gro-wth and development. However, no one can dispute that to achieve ‘inclusive growth’ consistently at the rate of 10 per cent, we need world class institutions. World class institutions can be created and managed only by world class professionals. Therefore India needs world class professionals. Accounting profes-sion should take the responsibility of strengthening institutions in which it plays the pivotal role. It has to play a more important role to support India’s journey to occupy the leadership position in the world.

The country is gripped with corruption. Media is abuzz about corruptions in different institutions and offices involving politicians and industry captains. Transparency International places India low in terms of ‘corruption perception index’. The score of 9-10 represents very clean. India’s score for the year 2010 is 3.3. If, India is high in corruption, professionals, particularly the accounting profession, cannot escape the responsibility. The society expects that the accounting profession will make all out efforts to eliminate corruption and that it will not use its skills and knowledge to manage corruption.

We hope that the members of the accounting profession will take note of this expectation.

The year 2011 will be an eventful year for the accounting profession. India will transit to the new set of accounting standards fully convergent with IFRS. This transition will be the beginning of a new era for the accounting profession. This is an opportunity for the members of the profession to show case their competence to the world. This will create an excellent opportunity for Indian accountants to export their services. They should prepare themselves take advantage of this opportunity.

While there is no agreed definition of a profession, I like to draw the attention of the members of the accounting profession to the def-inition provided by the Australian Council of Professions (Professions Australia), It defines a profession as: “A disciplined group of individuals who adhere to high ethical standards and uphold themselves to, and are accepted by, the public as possessing sepecialised knowledge and skills in a widely recognised, organized body of learning derived from education and training at a high level and who are prepared to exercise this knowledge and these skills in the interest of others. Inherent in this definition is the concept that the responsibility for the welfare, health and safety of the community shall take precedence over other considerations.” I like this definition because it captures societal expectations from a profession. It focuses on competence, ethics and social responsibility. Sometime we lose focus on ethics and social responsibility and emphasise on competence only. This definition helps us to hold our focus on ethics and social responsibility as well. Every member of the accounting profession should eva-luate his/her approach to profess-ional accountability in the light of the above definition.

Email: asish.bhattacharyya@gmail.com  

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First Published: Mon, December 27 2010. 00:03 IST
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