CA as a Complete Business Solution Provider

-CA Rama Subbarao K

I.          Introduction

What is the role of a chartered accountant in the Life cycle of a business entity?

The answer for this question would be “throughout the entire cycle”.As everyone knows a business cycle ranges from feasibility study to reinvesting or distributing profits out of the venture. A chartered accountant has role to play throughout the entire cycle by providing appropriate business solutions. The challenges faced by the business entities due to changes in business environment because of incorporation modern technology and techniques are also taken care by chartered accountants with their advanced and timely updated skill set.

II.          CA as a completed Business solution provider

What makes a chartered accountant a complete business solution provider?

The credit goes to the ICAI. The Institute of Chartered Accountants of India with a vision and objective of recognising the changes in the environment & technology, opportunities to the members, continuously strives to update the skill set of its members to cope with the recognised changes. ICAI is successful inkeeping competitive edge of its members by introducing timely developments like Continuous Professional education (CPE) where in all the members need to have a minimum professional update by attending various seminars conducted by the entity and Peer review where the quality of attestation work of the members is maintained and developed by a peer review programme.

The Institutes initiative in offering a qualitative and well designed curriculum for its students is another contribution for making Chartered accountant a complete business solution provider.

The curriculum of the CA course is one of the best of its kind in the world. The course involves a compulsory practical training ranging from 3 to 3.5 years where in a student in imparted with live exposure to the audit work wherein he gets an opportunity to interact with various business entities.

The course also imparts discipline and good attitude of managing stress as he learns to cope with practical training and preparation for the examination simultaneously.

The syllabus of the course is also continuously revised and updated according to changes in the laws and technology. The areas of knowledge imparted to a Chartered accountant student includes

III.          Areas of expertise and experience

•      Financial Accounting
•      Auditing
•      Cost Accounting
•      Taxation
•      Business and related laws
•      Financial Management and strategies
•      Reconstruction, Mergers and Amalgamations
•      Information Technology
•      Organisation and Management and etc.

The syllabus of the course is such that it imparts wide spread knowledge which allows to plan his career in any direction of his interest. With the practical exposure of solving problems in a business environment and theoretical knowledge of related fields of the business a chartered accountant will be in a position to provide situational solutions to all routine and unexpected non-routine problems.

IV.          Business solutions by a Chartered Accountant

What all solutions a chartered accountant can provide?

The traditional belief is that Chartered accountants only provide attest services and taxation consultancy. With the advancement in technology the scope of work of chartered accountants has also increased to a great extent. The areas of operations of a chartered accountant are not limited to just post-mortem job after the year end. They are the solution providers to lead a business entity to success path through achieving its objectives with well established and regulated control environment.

With the experience and knowledge in various fields a chartered accountant is in a position to provide complete business solutions. If we analyse the various stages of a business cycle where a chartered accountant can provide solutions at different levels of operation they include

•           Feasibility study of a project and its development
•          Assisting in incorporation formalities
•           Mobilising monitory resources
•           Capital structure planning
•           Financial Management
•           Development and maintenance a strong internal control system
•          Development of Financial reporting system and Concurrent review of Financial transactions
•          Internal Audit & continues review of performance with objectives
•          Tax planning and management
•           Compliance requirements
•           Due diligence
•          Certification and Attestation services
•      Computerization and compliance with required Information technology standards
•           Budgetary control, Costing and pricing policies
•         Amalgamations, Mergers, Reconstruction and restructuring of an entity
•          Overall management of the company affairs

How a chartered accountant provides the above solutions?

A chartered accountant can provide any or all of the above services by being a part of the entity or as a third party service provider. Nowadays Chartered Accountants are occupying key positions in many of the entities entrusted with responsibilities of regulating all or any of the above activities.

   a)  Feasibility study of a project and its development

The starting point of any venture is to do a feasibility study, Chartered accountant can study financial feasibility by using capital budgeting techniques and other feasibility studies using his experience and knowledge. After completion of feasibility study and based on the same a chartered accountant can prepare a project report with future expectations and basis of arriving the expectation.

   b)  Assisting in incorporation formalities

With his experience and knowledge in Company laws a chartered accountant can assist in incorporation formalities which include drafting of Memorandum\Articles of association and other procedures in incorporation of an entity.

   c)   Mobilising monitory resources

It includes planning for mobilising capital requirements through internal and external sources which includes bank loans by submitting a good project report about the operations of the entity.

   d) Capital structure planning

A well balance capital structure with adequate amounts of debt and equity will result in good returns to the share holders and valuation of the shares of the entity. A chartered accountant can assist an entity in choosing better debt equity ratio by analysing the requirements and applying his experience and various theories

   e)  Financial Management

Financial management includes developing appropriate strategies to balance cash inflows and outflows which ensure proper operation of business and generating good returns out of the operations. Now a days chartered accountants are playing the role of Financial Managers in many entities and successful as well.

   f)   Development and maintenance a strong internal control system

A well designed and adequate internal control system strives to achieve entity’s objective and ensures safe guard of entity’s efforts. Without a proper internal control system being available in an entity the entity will not have any regulation on the functioning of the organisation. Chartered accountants with his experience and familiarity with different kind of enterprises can make assessment of business risks; find out adequate controls to mitigate the same and an overall design incorporating the controls.

A chartered accountant is also capable of reviewing the implemented controls and tests its adequacy and effectiveness in real operation and suggests required improvements on timely basis.

   g) Development of Financial reporting system and Concurrent review of financial transactions

A Financial reporting system includes entry, processing, review and summarization of all financial transactions and preparation of financial statements for audit by a chartered accountant and publication/circulation of results to the share holders. Chartered accountants are most capable in performing this task with their experience and fluent expertise in the subject.

   h) Internal Audit & continues review of performance with objectives

Chartered accountants are enriched with good audit skills and experience which lets them to provide a class of art internal audit services which enables the management to take suitable actions to keep the organisation in the track to achieve its objectives.

   i)    Tax planning and management

The chartered accountants course curriculum ensures that the students are enriched with advance knowledge and application skills on tax related matters. Most of the tax planning and consultancy services are provided by chartered accountants in India with their sound knowledge in the taxation laws.

   j)    Compliance requirements

Chartered accountants can ensure that all the compliance requirements of the entity are met with in time with knowledge of laws that the company operate.

   k) Due diligence

Due diligence refers to an audit or investigation of potential investment to confirm all the material facts in regard to a sale. Chartered accountants are most capable of conducting a due diligence audit with their audit skill set and assuring the buyer about the facts of potential investment.

   l)    Certification and Attestation services

Chartered accountants by virtue of provisions of different statues are empowered with power to do certain certification and attestation services out which most popular are

•         Audits under Income tax act
•         Audits and certifications under companies act
•         Certifications of import, export, excise and other related matters.

   m)  Computerization and compliance with required Information technology standards

With advancement of technology most of the companies are now tending towards Information technology based Accounting system and implementing ERP across the entity. Chartered accountants with a extra experience and qualification through certification courses offered by the institute are in a position to assist in development of the Management information Systems, ERP and certifications required under different statues.

   n) Budgetary control, Costing and pricing policies

Chartered accountants will assist the management in planning a proper budget, comparing the budget with actual and analysing the variances, determining the better pricing policy according to the market conditions and maintenance of costing system of the entity.

   o) Amalgamations, Mergers, Reconstruction and restructuring of an entity

A rapid development and growth can be achieved by an entity through a well planned mergers and acquisitions gaining the synergy effects. Chartered accountants can assist the entity to plan a strategy for merger and acquisitions, measuring the benefit and cost out of the action and other procedural requirement throughout the process.

   p) Overall management of the company affairs

Many of the key positions in most of the entities have been occupied by chartered accountants leading the entity through success path. The positions occupied by chartered accountants in the corporate era include Finance Mangers, Directors, CEO, CFO and MD.

V.          Conclusion

The above explained areas are few of the areas where chartered accountants are providing services and the list includes BPO,KPO, Emerging areas like Energy Audit & Environmental Accounting etc.

Chartered accountants are best known as strategy setters. With experience in different fields, different work cultures they can provide a best strategy and solution for all business needs. All the problems (except of technical nature) in a business environment has a single solution provider – “A Chartered Accountant”. 

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