The Hindu Business Line : Goodbye grads, hello CPT students!

As a result of a conference convened by the Minister of Commerce and Industry, the ICAI constituted a special committee on training in 1959, which debated the issue: Whether there is any justification for the feeling that the quality of the candidates for the profession leaves much to be desired and some steps should be taken to ensure that the training is undergone only by the candidates who have an aptitude for the profession.

On this issue, the then committee came to the following conclusion: That in view of the fact that only in July 1956, the educational qualifications for entry into the profession were raised to the graduate level, or in the alternative, the passing of the Preliminary Examination, it was not necessary to upgrade the qualifications any further at this stage.

It would be evident from the figures that a very large proportion of article and the audit clerks are graduates and the number of non-graduates entering the profession is very low, particularly in recent years.

Hence, the minimum qualifications for entry into the profession should be left unchanged for the time being till the experiment mentioned above showed its results.

Right from the inception, this issue has been often debated and analysed by the ICAI. Except for a few years in the early 1980s wherein a restriction was imposed that only those havingpassed the entrance examination should be allowed for articleship.

Over the past five decades, committee after committee has concluded that graduates be directly permitted to register for the course and for the articleship training. However, apart from the graduates, candidates having cleared the Entrance/Foundation examination were also allowed direct entry to articleship.

The present council of the ICAI now proposes that the CPT Examination be made mandatory for all those wanting to join the Chartered Accountancy course and the same has been notified. This is unlike the earlier committees, which recommended exemption for the graduates having scored the requisite percentage from the appearance of the entrance examination.

According to the present council, better uniformity will be achieved by the CPT Exam route. Whether this amendment is justified is an issue for further analysis.

The report of the review committee in 1979 observed that quality must be given a special emphasis at the entry point and considered two of the aspects of the same, first, students joining the course must have the requisite degree of maturity and, second, aptitude. It concluded that the same could be achieved by making graduation and a uniform entrance examination compulsory. However, the same was not implemented.

Within a decade, the council was forced to have a re-look at this issue, subsequent to the national policy of education. The council proposed the Foundation examination and successfully implemented the same in 1992. Graduates with requisite percentage were however exempted from writing the Foundation examination and allowed direct entry for articleship.

The 1992-2002 period saw a phenomenal increase in the growth of the students on the introduction of the Foundation stream.

The total registration for articleship between April 3, 1993 and March 31, 2003 was 2,08,378, of whom students through the Foundation stream were73,179 (35 per cent) on the assumption that all the students passing the Foundation stream registered for the articleship. The number of students passing the Intermediate examination between April 1, 1994 and March 31, 2003 was 89,088. This indicates that the effective output of the students at the Intermediate level was 43 per cent.

The CRET Report in 1998 observed that though students entering through the Foundation stream performed better academically, they lacked the maturity for undergoing the articleship. Therefore, it suggested that students passing the PE II Exam alone should be registered for articleship.

This suggestion, implemented in 2002, is still in vogue, causing hardship both to the employers andthe students. The major drawback being extension of the duration of the course, which went to a minimum of five-and-half years. However, in the present proposal, the duration has been kept at a minimum of four years.

The issue of maturity vis-à-vis aptitude cannot be achieved by a mere theoretical examination; it requires an evaluation of both theory and practice. So far, the ICAI Examinations have laid more stress on theory than on practice. It is time more emphasis was laid on practicalities. This would enable a greater amount of accountability and efficiency on the part of both the Principal and the article clerk.

In the current proposal, it is open for anybody to question the balance between aptitude and maturity. As long as the two factors are independent, without proper evaluation, it does not make any difference in terms of the output whether a person is a graduate or a CPT student.

The performance of the Foundation students was found to be relatively better compared to the graduates only in a strict academic sense. Even on the assumption that 60 per cent of the Foundation students would have completed the Intermediate exam effectively, it can be clearly seen that the graduates have been quite successful at the Intermediate stage.

It is unfair to deny the opportunity to the graduates and, hence, there is no justification in not allowing them to register for articleship. The ICAI should reconsider this decision.

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