MR T. N. MANOHARAN, PRESIDENT, ICAI

Of over 27,000 students who appeared, more than 18,000 students passed. This, in sum, is the tale of the first Common Proficiency Test (CPT) conducted by the Institute of Chartered Accountants of India (ICAI) last month. Results of this new entry-level hurdle for the CA (chartered accountancy) course were released in record time just about three weeks compared to the wait of over two months that CA students typically endure in the case of PE-II and Final. "In a year or two, the CPT can be made online," hopes the President of the ICAI, Mr T. N. Manoharan. If the online CPT is implemented, even the three-week waiting period may vanish because "the student should be in a position to know the result instantaneously." Here, Mr Manoharan answers the many questions about CPT that Business Line posed to him:

Are the results of the first CPT in tune with the ICAI's expectations? How many do you expect will clear the CPT annually, going by the first results?

The existing curriculum was reviewed with a view to reduce the duration of the course to make it comparable and competitive with other professional courses; to modernise the syllabus and to blend theoretical education with practical training. These objectives have been achieved in launching the new CA curriculum. These salient aspects have created the necessary impact on the younger generation. This has resulted in overwhelming response to the first CPT held on November 12. ICAI expected good results in view of the fact that bright boys and girls are attracted to pursue the CA course. But the result of 66.3 per cent was beyond our expectation.

We expect an annual inflow of not less than one lakh students to take up CPT as against the present 40,000 odd taking the PE-I. We expect more than 50,000 students to join articleship annually.

Your observations about the performance of students in the different subjects strengths and weaknesses. What topics merit extra attention on the part of candidates appearing for CPT?

As the CA curriculum welcomes students from all streams , students from a commerce background find Session-I, comprising accountancy and mercantile law easier, and Session-II, comprising economics and quantitative aptitude, a bit difficult. Students who come from the mathematics and science streams find Session-I difficult to cope with. That is why we have permitted enrolment for CPT immediately after theTenth Standard. This will enable the boys and girls to prepare for the CPT in two years time as they pursue Eleventh and Twelfth standards. They can devote some time during the week-ends, holidays and summer vacation to comprehend such subjects that are not part of their school curriculum. All the four subjects which are part of CPT call for equal attention on the part of the candidates. As the level of knowledge expected is basic, it should not be too difficult for the younger generation to equip themselves to qualify in the CPT.

Does the ICAI propose to make changes to the CPT scheme say, its frequency?

For now, we are convinced that four times a year is the appropriate frequency of holding CPT. The change we foresee is in the methodology of conducting it. In a year or two, CPT can be made an online test. Once this is accomplished, ICAI will review the frequency of holding it.

What are the immediate options before students who have passed CPT?

The students who have qualified should join audit firms to get the practical training besides registering with the ICAI for Professional Competency Course (PCC). During the three-and-a-half years of practical training, they will be imparted with Information Technology Training (ITT) and General Management and Communication Skills (GMCS). After they finish these courses and the training period, and pass in Professional Competency Examination (PCE), students can take up the final examination either in May or in November on passing which one can become a chartered accountant. A +2 student who appears for CPT at the age of 17 can aspire to become a member of ICAI at the age of 21.

A student who is already doing graduation in a regular college, has three options:

The student can pursue the graduation in an evening or part-time college and join the practical training;

The student can switch over to correspondence course to complete graduation and join the practical training; or

The student can complete graduation and then join the practical training.

The CPT pass obtained even now will be valid up to May 2009 as per the decision of the Council.

Does a pass in CPT make the student eligible for employment? Of what type?

A student who passes CPT is recognised as eligible to join the CA course. CPT is a screening mechanism to admit students into the curriculum. This is not a test that enables or guarantees, by itself, any job opportunity. A student who passes CPT and joins the CA course will be paid a monthly stipend by the audit firm, where he gets trained. Students can earn while they learn during the CA course.

How many do you expect to take up articleship? Do we have the required number of articleship vacancies among CAs? Is there a danger of a supply-demand mismatch? Is the ICAI contemplating increase in articled clerks for practising chartered accountants to accommodate the huge inflow of students?

As you may be aware, the nomenclature "Articled Clerk" has been replaced by "Articled Assistants" by the Chartered Accountants Amendment Act, 2006. The flow of students is increasing and, with the launching of the new curriculum, it would steadily escalate. We have recommended to the government for a change in regulations so as to enhance the number of vacancies for training; we are awaiting approval. As per the recommendation, a member should be able to train up to seven assistants depending on the number of years of standing in the profession.

Besides, the recommendation enables qualified paid assistants with more than one-year association in a firm to be eligible to train one Articled Assistant. However, the number of articled assistants who can be trained on the basis of such paid assistants in a firm shall not exceed in aggregate the total number of vacancies available to the proprietor/partners of that firm. We are awaiting government's approval, which is expected in a month or so, for such increased number of vacancies to be granted to practising chartered accountants.

The demand-supply match will always be ensured and monitored by the ICAI and appropriate steps will be taken as the situation warrants.

CPT has to be taken by every aspiring CA student, whether he or she has passed higher secondary, degree or PG. Is there a need for exempting graduates and PGs from CPT?

No professional course that has an entrance examination grants exemption to a graduate or a post-graduate. Everyone is required to undergo the screening test to qualify for admission. This will prevent students not having the required aptitude getting into the curriculum and contribute to the increase in the failure percentage, thereby creating a wrong notion that CA exams are beyond comprehension.

Besides, the objective of CPT is to catch the students young, just as medicine, engineering and law courses are designed. Granting exemption from CPT will encourage a student to relegate CA course to a secondary status and pursue the course that gets in the exemption as the main course. Knowing that all universities and colleges in India do not produce a uniform quality of graduates, CPT is a must to ensure that the raw material in terms of students are duly filtered before they are processed in the curriculum and produced as chartered accountants.

Earlier, the exemption granted to graduates from foundation course or PE-I was justified as they required 10 months of study period. A graduate who has spent three long years was exempted from spending yet another year to enter into the curriculum. This reasoning does not apply in the present scenario as there is no waiting period to appear for CPT. A registration requirement of two months prior to the month in which the examination is held does not call for any such exemption.

Considering that CPT exams are held once in three months, a student can plan for registration while pursuing Eleventh/Twelfth standard or first/second/third year of graduation. Non-granting of exemption is bound to encourage a student to take up CPT at the earliest after appearance in the Twelfth Standard examination. Therefore, there are many reasons for not granting exemption from CPT to anyone.

In CPT, negative marking is only 0.25 for a wrong answer. Is there a proposal to increase this?

The Council has the power to modify the quantum of negative marking. As of now there is no proposal to modify the existing pattern of reducing 0.25 for a wrong answer.

Will the ICAI give any accreditation to limited companies and other entities for training articled clerks, to accommodate the huge pass percentage of students from CPT?

In view of the expected increase in the vacancies for practising chartered accountants to train articled assistants in the near future, there will be no need to grant such accreditation. There will be enough vacancies to accommodate all students in audit firms. The system of permitting the student to go for industrial training during the last year of his practical training is continued in the new curriculum also so as to facilitate industry exposure to students.

CPT is an objective-type, multiple-choice examination module. Does it really test the proficiency of the students or is it a ritual introduced by ICAI to `catch students young' ?

The objective of CPT is both to "catch them young" and "catch the cream." The decision making process for ICAI to admit or to reject a candidate is made easier and the fate of the student, whether he is in or out, is made known faster in the least amount of his time. These are the intended advantages of CPT which we are sure will be welcomed by parents, teachers and students. The four year duration and the bright career options on qualification is bound to attract the best of students in general, and girls in particular, to join CA course. There was a notion, five years ago, that only a software professional could get a job anywhere in the world. The same tag is now attached to an Indian chartered accountant who can settle down anywhere in the world with an attractive pay package. There is an acute shortage of CAs not only in India but world over.

Will the ICAI give CPT examinees the option of paying only the exam fee instead of paying Rs 1,500 towards exam fee, including cost of study material. This will help reduce the cost of CPT exam appearance for the candidates.

ICAI is not merely an examination conducting institution. It is also expected to impart education before testing the standard of the student. The pattern of education adopted by ICAI is distant mode of education. Coaching facility provided at the branches of ICAI, namely, regional centres and branches, are additional and optional. Therefore, the ICAI has prepared study material that will help students prepare for the CPT. The fee of Rs 1,500 covers the cost of the study material and therefore, it will be not possible to dispense with such fee collection. Considering the fact that the entire course fee payable to the Institute throughout the curriculum totals only to Rs 17,500, far lower compared to other professional courses, this should not hurt the education budget in any family.

Does the ICAI cross-subsidise non-student activities with student revenues?

The facilities offered by ICAI are substantial and met out of the student revenues. Library and reading-room facilities are provided throughout the country. Virtual classroom facility is offered to enable students to get the benefit of lectures by eminent faculties. E-learning will be soon introduced to facilitate dissemination of knowledge and information to students across the globe. Seminars and conferences are organised by subsidising the cost. Student association activities are also funded to promote talent and learning. Debates and quiz competitions are conducted annually at all levels.

From January, student study circle meetings will be held on a weekly basis to impart soft skills and promote personality development among students under the new concept "continuous professional learning" (CPL). A students' education and welfare fund is proposed to provide merit/need-based scholarships and also to offer financial assistance in the event of crisis.

How about a modified and subsidised CPT that is open to anyone, to promote financial literacy among people?

ICAI has been bringing out publications for the benefit of the public on matters relating to budget and finance. At present, we are contemplating bringing out publications to create awareness among people for making investments in a prudent manner and also to promote financial literacy.