Finance professionals are central to a fast-growing economy like India. As of April 2022, India was home to more than three lakh Chartered Accountants (CAs), loosely known as ‘financial doctors’. A CA at large scrutinises complex tax compliance sections and helps companies and individuals manage their finances in the best possible manner, often by liaising with government authorities. As professionals, CAs take up the gamut of functions relating to financial management on behalf of their clients: from crafting a company’s or individual’s tax strategies to auditing, financial planning, wealth management, tax planning, and filing income tax statements.
Over a decade or so, the profession has seen exponential growth, thanks to India’s growing number of businesses and young student population interested in becoming finance professionals. The demand for CAs has been on the rise. However, the general perception is that pursuing the Chartered Accountancy course is an uphill task. Well! Is it an exaggeration? Or, do you just need a great deal of patience to clear the course? The Pioneer’s Amartya Smaran gives you the low-down on what is considered to be among India’s toughest professional courses.
Let us take a look at the group-wise(final) pass percentage of CA aspirants for May 2022 and November 2022. According to the statistical report presented by the Institute of Chartered Accountants of India (ICAI), in May 2022, 66,575 students appeared for Group-1(final) and 14,643 passed; a pass percentage of 21.99. And 63,253 students appeared for Group-2(final) and 13,877 passed(21.94%). In all, 29,348 aspirants appeared for both groups(final) and 3,695 students passed(12.59%).
As of November 2022, 65,291 students appeared for Group-1(final) and 13,969 passed(21.39%). In all, 64,775 students appeared for Group-2(final) and 12053 passed(18.61%). As per both groups(final), 29,242 appeared and 3243 passed(11.09%). We’ve taken into consideration only the final leg of the CA examination.
When we compare these figures to that of November 2017, one major difference we find is that only 39,328 students have appeared for Group-1(final)(15.91%); 39,753 appeared for Group-2(final)(15.11); 30,054 appeared for both groups(final)(7.50%).This, in comparison to the November 2022 figures, shows that the number of students who have attempted each of the groups doubled and as a result, the pass percentages have also risen accordingly. Albeit, the figures are bound to make us think that the pass percentage of the CA examination is pretty low.
What’s wrong with the ones who are not able to clear the course? VS Hiranmai, FCA, ACMA, registered valuer, says Chartered Accountancy is a self-study course. “The moment a person joins the course, they are in search of a lot of institutions and think everything will be spoon-fed to them like in regular schools and colleges. Individuals who go into the vicious cycle of failing over and over again have the tendency of blaming the teachers or saying the portion’s not complete. The students who are clearing the course own it up. They give 150 percent to the course the moment they sign up.”
VS Hiranmai underscores the importance of getting a grip over the exam. “The basic mistake students are making is they prepare, revise, and go sit in the exam. The area where many students are lacking is that they don’t take up any revision/practice tests.
Before going to the final exams, when you are writing the test in the exam environment, you will come to know how you are able to manage. You’ll learn how to handle pressure. Be it inter/final, if one wants to crack the question paper in a better manner and manage one’s time well, you have to take a number of practice tests.”
She says the notion that the institute maintains a certain pass percentage is not entirely true. The examiner or board(ICAI) expects a certain perspective from your end. It’s not that the exam is getting tougher. The environment is changing, and the profession is such that you need to continuously update yourself. Keeping in view of whatever is happening, they are just tailoring the course. They are keeping it a little more practical.They are bringing in newer things to match international standards and want us to be more competitive. It’s not a matter of making the course tougher, it’s about polishing you and trying to bring out the best, according to Hiranmai.
Giving her advice on how students can prepare in order to clear the exams with ease, the experienced teacher opines: “I feel people who emerge victorious or clear in the third or fourth attempt have higher confidence levels. They trust themselves more. The other students who find themselves struggling are always worried about the outcome. It is basically how you train your mind. Your preparation should go in line with what the institute is expecting. Do a little bit of smart and take a lot of practice tests so that you’ll get accustomed to the pattern. And don’t write and leave it. See how they’ve evaluated and check where you’re standing regarding your presentations. Seeing and correcting your mistakes will help you a lot.”
Akhil Osuri is one of those students who discontinued the course and switched career paths. When he was in 11th standard, Akhil decided to become a CA. However, he told us that he didn’t do enough research about the course. “One mistake that I’ve made is, I didn’t do thorough research before joining the course. I got to know the pros and cons only after joining. In order to pursue CA, you have to be fully into it. Only then, you’ll be to clear it,” shared Akhil, who works as an analyst at one of the big MNCs.
The analyst says there’s not much of a social life if you take up the course. “You’ll miss college life and networking. You go to classes but just for a short period of time. For one particular class, you go to one place and for other classes, you go to another place. It’s just that you’ll only be concentrating on the subjects. And you won’t be meeting many people.”
Akhil wrote his finals twice and spent almost two years trying to clear the groups. Two years prior to appearing for the finals, he had already finished a course called CMA(Certified Management Accounting). He says, just to finish CA, he wasted two years. “During Covid, I decided to do something about it,” said Akhil. “My ultimate thing was to work in an MNC. I didn’t want to start any practice.
I felt it wouldn’t make much of a difference. Also, I was not sure when I’ll be able to complete the course. I thought, instead of wasting time and making attempts, it’s better to start working so that I’ll have better work experience. I don’t regret having taken this decision. I may not plan on writing CA final exams soon, but I’m thinking of doing CPA (Certified Public Accountant); the US version of CA. It’s easier! There you can write the exam paper-wise, but here you have to write the entire group…
In case you fail one subject, it’ll affect the entire group again.”
It is a fact that clearing various levels of the CA course (foundation, intermediate, final) needs rigorous practice, saint-like patience, and an athlete’s determination. Approximately 7,50,000 students enrolled in the CA course offered by the ICAI, as of 2022. Only a tiny fraction of these aspirants will end up with the CA tag at the end. Oh, wait! There’s no age limit as such to get through the course.
Looking at the number of students who enroll and the percentage of them who make the cut, it sure does give the impression that it is one of the toughest courses to pursue. A lot of these students indeed struggle to get through the intermediate or final levels of the course and drop out. According to a recent report, the Chartered Accountancy course has a success rate of less than 16% and there are more than half a million dropout CAs in the market.
Sharing his insights on the topic, senior Chartered Accountant and past chairman of Hyderabad branch of SIRC(Southern Indian Regional Council) of ICAI(Institute of Chartered Accountants of India), Pankaj Trivedi comments: “The problem is, the course is designed in such a way together with the aptitude of the students is the reason for a lot of failures. Any professional exam is tough. In our profession, we continuously have to go to offices and work. When you’re working it’s a 10-6 job again and tiring as well. On those days, students will not find time to study. Even if they get time, they also join tuition.
They feel that they are studying in tuition but unless you revise properly it will not be of much help. They want to finish the entire syllabus in about a month leading up to the exam and put in 10-12 hours. After you take the exam, because you studied so much, there’s some optimism that you’ll pass. In between the days of exams to results, here also there’s no effort to study. Hence, results come, you fail narrowly, and follow the same pattern of studying. This cycle continues with the majority of them. This is my reason why people are failing.”
Srikar[name changed] initially planned to pursue Engineering but decided to go ahead with Chartered Accountancy. A decision he would take following a casual discussion at his cousin’s place. Another cousin of Srikar had already cleared her CPT (Common Proficiency Test) and she told him, “It’s not as tough as you think. You just have to be consistent.” And those encouraging words pushed the young Srikar to enroll himself in the course. As of now, he has flunked the final exam thrice.
“Let it be CPT, Inter, or Final, it requires a dedication of about two to three months,” says Srikar in an assuring tone. “You have to sit in one place and study daily. If you’re not able to do it, then it gets tougher. You can’t be a master of every subject. You just have to know the tactics that will get you 60 in the exam. Once you prepare for 40, you end up getting 30. You have to be prepared in about 80% of the syllabus and that’ll help you get 60. It also has the law of aggregates where you individually have to score a certain amount of marks (40% individual marks per subject) and cumulatively (50%) for the entire group as well to get through. Once you don’t clear your exam, there’s a roadblock. To be honest, if you want to clear it, you have to do it in one shot.”
Srikar is hopeful that this time around, he’ll be able to finish his course and he’s someone who loves challenging himself. “This course is so addictive that before you fail, you’re of the opinion that this is my last attempt or search for another alternative. What happens is there are certain cases where people worked at places and realized they’re not being valued as to how they should be valued. A guy with a CA Inter knowledge is far better than a B. Com grad. The issue is both will be paid the same. The person will end up thinking, when I have more knowledge, why am I being paid less? That makes people want to get back to the course again. Every time you try to run away from the course, it somehow catches you and pulls you back. You may skip an attempt or so, but ultimately you’ll come back to the course. It’s like a dead trap,” shares an excited Srikar.
Speaking of the law of aggregates, which most aspiring CAs despise, CA Pankaj Trivedi explains: “You need to have equal knowledge of the subjects. What they are saying is that 40 marks is the minimum. If you’re too good at a subject and get 60 and above, that means you’re very well prepared and you don’t have to write the exam for three attempts. But when a person gets 60 and then scores 50 and 20; it clearly shows that he/she has not concentrated on other papers. I think it’s a better thing when they say minimum marks are expected in every paper and then a total aggregate. If I don’t get it, you can’t go ahead.
It is 40% and 50%, right? They are not keeping 70% and 80%. I don’t think it’d be proper if they say, you failed in two, so you write two. It’s not once in a way study. You are putting into practice what you’re studying immediately. Even after passing CA, we’re supposed to continue studying. Thankfully, we are not asked to take any exams, but it is mandatory for us to do 100-odd hours of study in three years period. That’s why I feel it’s a good thing that they’re asking us not to do it on a piecemeal basis.”
The experienced CA opines: “Don’t depend on that last two months’ studies. Gradually increase it and keep it up to 7-8 hours per day which is more than enough if you do it for that full 6 or 8 months. And don’t think that you’ll get 80-90 in exam. You’ll find new questions every time you see the paper. If you enter the room with 80, the moment you read the first question, your dream is shattered and mentally you’ll not be in a position to read the other questions properly. Try to get in thinking that first I’ll try for 40 then 50 and then more. If you go with that attitude, your mind can still take a couple of tough questions. It matters a lot with what attitude you’re facing the questions.
Pass or fail matters, the ranks and all don’t matter in our profession. So, why do you want to unnecessarily strain yourself? No one is preventing you from getting good ranks but why do you want to strain yourself? Don’t be worried about failure. It was a tough exam, so we failed. See where you went wrong and try to come up with a better way.”
Established by an Act of Parliament, ICAI is the second-largest professional body of Chartered Accountants in the world. ICAI is responsible for regulating the profession in the country in accordance with the provisions of the Chartered Accountants Act, 1949 and the Chartered Accountants Act, 1988. As per the 73rd Annual Report and Accounts of the Institute for the year 2021-22, organizing Campus Placement programme is one of the prime endeavours of the CMI&B(Committee for Members in Industry and Business) in order to connect and bring together the newly qualified CAs (NQCAs) and the recruiters on a common platform.
Data suggests that through campus placements, jobs offered to Newly Qualified Chartered Accountants (NQCAs) nearly increased five times between 2015 to 2022. And the quantity of registered students has also doubled around those eight years. While 2017 has seen the highest job acceptance rate(95%) amongst NQCAs, the number fluctuated to 57% in 2021. In all, 55 editions of placement programmes were conducted by CMI&B till March 2022. The committee has witnessed 10,197 registrations in 2022, which happens to be the highest in the last eight years.
In 2022, 7,360 jobs were offered by different companies that were participating in the placement programme and 5,538 jobs have been accepted. That sums up to a 75.2% acceptance rate. This represents a significant drop from 91.5 percent in 2015, when 1,254 jobs were accepted out of 1,371 offered by 90 participating companies.The number of jobs offered has gradually increased over the years and so did the number of participating companies, but the acceptance rates among candidates fluctuated.The highest annual salary(in Rs lakh) has risen from 21 in 2016 to 30.3 in 2022. Coming to the average salary, for 2021, it is around 9.2 lakhs per annum. All this shows the claims made by people that CA has no formal education system in place is a fallacy. As it has its own regulatory body that is doing its best to extend support to students and newly qualified CAs alike.
“There’s already a structured education in place,” shared Talluri Rajendra Prasad, Senior Chartered Accountant and Author. “This is not about formal education. It’s a self-learning course. That’s the original idea. This self-learning course is coupled with article training. So, the aspirants work for 6-7 in their office and then spend time on academics. Therefore, they have a good balance of theoretical knowledge coupled with practical experience. There is always formal education in place. The structured material the institute provides to anyone who signs up for the course is very good. What he/she needs to do is understand the concepts thoroughly and apply them to a particular situation.”
Talluri Rajendra Prasad says the term ‘tough’ is relative. CA Rajendra assures aspirants that the course has always maintained its standards. “Any person who is seriously interested in pursuing this course, only he/she can get through it. It is not like any ordinary degree where people walk in and spend some time. It can be cracked if one is seriously interested in the subject. Only hard work and discipline are required. It is as simple as that,” says CA Rajendra.
“You are the backbone for the entire country in terms of the profession of accountancy,” continues Rajendra Prasad. “The tax laws keep changing. Earlier, it used to be on a yearly basis and now it’s on a daily basis. Even a small miscalculation will become a costly experiment in this course. You can’t keep up with the pace when you enter the profession unless you work hard and struggle at the time of education. Those who’re never serious can never clear the course. It’s a unique course. No matter where you take up the course, the course quality is the same.”
Ram is another aspiring CA who failed the final exam thrice. He thinks one has to figure out a few important areas and go with them to pass the exam. However, he also feels your soul won’t be satisfied if one follows that particular way of studying for the exam. Ram feels the key lies in reading, understanding, and learning the material and then reproducing it on the day of the exam. Ram spends around 10-12 hours 30 days prior to the exam, a strict no if we look at what CA Pankaj Trivedi had suggested. The young aspiring CA was totally fed up with the cycle after he flunked for the second time. “I just took a break. Got a job at one of the companies and worked there for six months. I skipped an attempt because there’s too much in life to explore,” said Ram.
Now, with a renewed philosophy and great willpower, Ram is looking forward to clearing the exams this May and he’s got a suggestion for the institute(ICAI) here. “I want them to finish the exams as soon as possible because what happens is after Inter, you have to take three years of articleship. In these three years, you’ll be exposed to all the practical things in the world. At the end of the exam, you have to sit down and jot down theoretical, redundant and irrelevant concepts. I mean, it’d be great if they could get down with the exams first. Or else try to put an exam which factors the external factors as well; case study based or open book system. You don’t have to jot things. You have to analyse and pick things from the internet.”
It’s not the failure that bothers these students but the idea that they’re being looked down upon by their own. The first question that a relative or an acquaintance asks any young person is, “What are you doing in life?” If that is answered, then comes the inevitable, “How much do you earn?” or “Did you clear that CA exam?” All this brings a sense of unnecessary pressure, and the constant nagging gets to the student’s mind.
Well, as life-long learners and just as registered students of a professional course, we must understand that failing at something helps us understand a part of ourselves, but it is also important that we shouldn’t accept mediocrity and get comfortable with failure nor get too complacent the moment we succeed.
