Editorial
Ever since we took up the study of chartered accountancy, it
has been ingrained in us that constant professional change is something that we
have to necessarily live with and adapt to. No other profession is perhaps
subjected to so many changes happening at such frequent intervals in the subject
matter of its practice. All of us have got accustomed to and have adapted to the
annual wholesale changes in the tax laws. However, today in India, we are at a
stage where every sphere of our practice is in a state of flux, where change is
happening at a much greater pace, requiring us not only to learn new laws and
skills, but also to unlearn a part of what we have learnt in the past.
In auditing, our core area of practice, we not only have
various auditing standards to comply with, but totally new accounting standards
and practices of IFRS to understand over the next couple of years. As if that
were not sufficient, a Companies Bill has been introduced to replace the 52-year
old Companies Act that we are familiar with.
In internal auditing, we have a new set of standards being
put in place, which we need to adapt to and comply with. Our income tax law has
always seen new taxes or new provisions every year — we are threatened by
wholesale changes in the form of the new Direct Taxes Code. Fortunately, that is
not likely to happen in the immediate future. Our service tax law is ever
changing with new services and new provisions added every year — along with the
recently introduced VAT law and Central Excise, this is now likely to be
encompassed within a totally new goods and services tax, in a couple of years.
The amount of knowledge that we would be required to acquire
over the next two or three years makes us think that perhaps we are once again
studying for our CA course !
The recent downswing and turmoil in the world economy and the
Indian economy throws up its own challenges. There is of course the challenge of
ensuring growth in one’s professional career, in spite of severe downturns in
the business cycle. More significantly, the recent business failures have raised
questions internationally, regarding the relevance of auditing as practised
today, and various accounting concepts, such as mark-to-market. We are yet to
embrace some of those concepts in India, and even before we do so, they may
undergo significant changes or be discarded internationally !
Why, even the manner in which we practise has to undergo a
change. The increasing strength of global firms, the increased expectations of
clients due to globalisation, the increased competition for talented people due
to entry of global businesses in India, increasing computerisation and e-filing
— all these are challenges which one has to face.
Each one of us has to clearly now sit down, think, choose and
chalk out our own growth strategy. Should one consider joining a large firm
drawing a good remuneration ? Should one network with other similar minded
firms, with each firm focussing on a niche area of practice ? Or should one
merge with other similar minded firms ? Should one convert the partnership firm
into a limited liability partnership ? Should one continue on one’s own with a
focussed approach of concentrating either on a few areas of practice or with a
few clients ? Or should one join industry ?
We are fortunate today to have so many choices of change.
Each alternative has its own risks and rewards. Based on one’s own perception of
levels of acceptable risk and desired rewards, each one of us has to make a
choice. Not making any change by ignoring the massive changes happening all
around us is not an option at all — that will only result in our professional
stagnation or decline.
We need to look at the challenges or threats that we face as
opportunities. Many of us may not have learnt certain laws in the past, such as
sales tax or VAT, excise duty, etc. The introduction of new laws facilitates our
learning of these laws from their inception, and provides us an opportunity of
offering services in newer areas of practice. The introduction of service tax in
1994 is a classic example — so many of us have learnt that law and are today
focussed on that area of practice for our growth.
The Journal, as always, seeks to support you in your efforts
to meet the challenge of change. In this issue, under the painstaking efforts of
the past editor of the Journal and Chairman of the Diamond Jubilee Celebration
Committee, K. C. Narang, we bring you special articles contributed by eminent
chartered accountants and other professionals from various spheres of life, to
help you understand and prepare for changes happening or likely to happen in
different spheres of our practice.
We hope this will facilitate your making the right choices in
time to meet the challenges of change, and ensure your rapid professional
development and growth.
Gautam Nayak
