What is Chartered Accountancy (CA)?
what is a chartered accountant?
CA (Chartered Accountant) is a professional practice of accounting, auditing, taxation, and financial assessment for a company.
Chartered accountancy, in its essence, looks very closely into the workings of a business, big or small. Therefore, it is the foundation of all firms. CA responsibilities and duties include financial planning, budgeting, business strategy formulation, and overall management of the finances of the company. Chartered Accounts face tough challenges and greater rewards.
The ICAI (Institute of Chartered Accountants of India) is a national professional body that works towards the up-gradation of the CA profession and regulates CA exams in India.
The CA qualification has been witnessing a rapid climb in the accountancy domain. Various changes taking place within the economy of the country are putting massive responsibilities on Chartered Accountants.
CA’s can assist new entrepreneurs in establishing their businesses. They can also work for existing companies in expanding their operations. To sustain in such an industry, CA’s must stay up to date with the industry knowledge, the legal frameworks, land and building requirements, industry technical breakthroughs, financial arrangements, etc.
The kinds of functions generally performed by the accountant are as follows:
Preparation of financial statements
CA’s are skilled in maintaining accounts and account balances. Therefore, they can closely work on the preparation of monetary statements. It encompasses a good area of the business, from simple bookkeeping to complex financial analysis.
Auditing
Auditing is the foremost important function of an accountant. An audit is the art of systematic and autonomous analysis and inspection of financial information, management accounts, management reports, accounting records, operational reports, income, revenue and expenditure reports, etc. Shareholders and other inner stakeholders are notified of the outcome of the review and inquiry.
For public or listed companies, audit reports shall be made available to the general public. For private companies, while their audit reports are not mandatorily made available to the public, audit reports may get submitted to other stakeholders such as govt, banks, creditors. The audit has many distinct kinds and levels of categories according to goals, scopes, purposes, and auditing processes.
An audit report usually complies with International Auditing Standards (ISA) and other local auditing norms. There are several types of audit, namely, economic audit, operational audit, statutory audit, compliance audit, etc.
Taxation
Current and continuing tax information becomes vital to the economics of business management with so many taxes. The assessment of taxes requires an understanding of financial accounts. Accountants are at an advantage for preparing the returns for tax purposes, representing assessments before the Income-Tax authorities and rendering general advice to their clients.
Another responsibility placed on them is that their services are required by the tax department for complicated auditing cases, having revenue potential.
Cost Accountancy
CA’s have training in the pricing of products. They also understand processes at different levels of operations within the manufacturing of a product or a service. They supply costing information to the management, introduce cost control methods and assist the management in establishing justified selling prices.
Special Company Work
CA’s can take up secretarial and registration work, formation, financial structure and liquidation of limited companies. Therefore the duties of a receiver also are undertaken by chartered accountants, additionally to other company work.
Investigation
Chartered Accountants are often called upon to hold out investigations to determine the financial position of business about matters like a replacement issue of share capital. Their services are sought for undertaking special inquiries to achieve greater efficiency in management or administration, check out reasons regarding increase or decrease in profits etc.
Executors and Trustees
An accountant is often appointed as an executor under a will or a trust. They hold on to the administration of the estate or settlements. Appointments of this nature require the accountant to work in Co-operation will solicitors or Lawyers.
Directorship
Many members of the Institute who hold a senior positions in industry and commerce also are directors of their companies. Directors of the companies also carry public practice.
Companies Secretarial Work
In most companies, the Secretary may be a man with certified qualifications (often a Chartered Accountant) who, in addition to their other duties, is a crucial link within the management chain. The continued growth of limited companies enables professional accountants to supply secretarial services to small companies, many of which get carried out by individuals who can not afford a full-time secretary.
Management Accounting
This domain requires working with the management of a company for roles such as policy formulation. Management accountants work on the designing of the format of cost and financial control reports. Therefore, as they progress into the management, they are designated as the Chief Intelligence Officer.
Share Valuation Work
The accountant undertakes the valuation of shares of public and personal companies when acquisitions, mergers and amalgamation, or re-organisation takes place intending to take overbids.
Pursue Government/Civil services
CA’s can pursue government jobs for the roles of the Civil services courses. Therefore, they may get appointed for positions like the ITAT tribunal president (income tax appellate tribunal) or the chairman of the SEBI (securities exchange board of India). However, these positions are mostly achieved by dedicating several years to the government sector.
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