Chartered Accountant

The Chartered Accontantcy course in India entails three years of articleship – that has now been elongated to three and half years. (Update: Articleship duration was increased to three and half years when PCC was introduced in 2006-07. But since 2009, under IPCE, it is back to three years). However, there are certain information that is not normally available. So, the not so common rules and information that I have found through my struggles during articleship are:

1) Holiday

An articled assistant is entitled to all gazetted holidays that is given by the Government of India and adopted by the institute. So, in whichever day the Institute has a holiday – the Articled Assistants are also entitled to a holiday. Also, Sundays are holidays and not leave. Even Saturday could be a holiday, if the Firm follows five day week. The point is – any holiday or a normal weekend holiday would be counted as part of articleship.

The only exception is where the Article has taken a long duration leave say from 1st of month to 20th of a month. So any Sunday or holiday falling in between the duration of leave would get counted as part of leave.

2) Leave

An Articled Assistant is entitled to leave amounting to one sixth of period actually served. So, if you see the word ‘actually’, it makes the quantum of leave very dynamic to calculate. So, as per the institute, if someone is in three years of articleship. that means – total number of days = 365 x 3 = 1095 days.

Suppose leave taken is 180 days
Then, number of days actually served = 1095 – 180 = 915 days
Now, 915 / 6 = 152 days
So, excess leave taken = 180 – 152 = 28 days : which the Article will have to serve additionally to his normal duration of articleship – if he has already taken 180 days leave !

Consequently, the maximum number of leave permissible in a three year articleship is 155 days. And for a three and half year articleship it is around 180 days.

The other thing is, that if one is attending any Seminar/ conference/ training courses organised by the institute or appearing in any exam of the institute, those days are counted as part of articleship. So, if one is attending the three month training session organised by the institute then those three months of training are part of your articleship training.

Also, in case of ITT training, 20 days are specified as part of articleship. So if someone does ITT while doing articleship – upto 20 days period is part of articleshp – excess of that period (even if it be due to fault of institute in taking more than 20 days for 100 hours training) would be counted as leave.

Also, if one is attending GMCS while doing articleship, that period (90 hours) would be counted as part of articleship and not leave. Usually GMCS is finished in 2 weeks flat.

Similarly if one is appearing in Exams conducted by ICAI like Inter / Final while doing articleship – then that period of exam (inclusive of vacant days in between that exam) would be counted as part of articleship training.

3) Timing of Work

The institute clearly states that the article has to do 35 hours of training per week. As the institute puts it, the office for the Article should not start before 9 AM and not end after 7 PM. And that the office should not start after 11 AM or end before 5 PM. The duration of 35 hours is exclusive of lunch period! The institute also provides that if for some reason the work period in a week reaches 45 hours, then the Article has to be given compensatory leave.

Also, the trainee can claim set-off for each excess hours put in work. For example if the trainee has worked 40 hours in week A, then in some other week B he can work 30 hours and claim set off for the 5 hours that s/he had worked excess in week A.

Good firms often compensate for excess work hours or work done during holidays. But not all principals do that. In reality, the article may have to put in on an average 7 to 8 hours per day, 6 days a week and without any compensatory leave! And if that is not enough, articles may be called to work even on Sunday or any Holiday – particularly during the season of statutory audit and tax audit. Once during the statutory bank audit, my office day started at 10 AM and ended on 4 AM the next morning! And then I was again ready at 10 AM, the same day – for ‘another’ day of bank audit – and even later on there was no compensatory leave! There have been many occasions when I had to do audit upto 10 PM or 12 Midnight, without any compensatory leave (or even relaxation in office time)!

4) Using Articles for other work

This is something very bad on part of certain members of the institute that they consider the article as something of their personal servant. In mofussil towns, its quite common to find the helper / peon of the office getting 900 to 1500 per month, while the newly inducted Article gets 750 per month! I have seen articles being sent to get the scooter or the motorcycle of the principal repaired – and spending the day with the mechanic!

There are also some CAs, who apart from practice also have side business – which is often in name of some family member. In such situation, one can well find such CAs using the Article in the side business – the Articles being cheap substitute for full time employees. All such practices are against the rules of the institute.

On such kind of practices of the members, there is no control by the institute. Also, the article being a new entrant does not know what is right and what is wrong. Also, I have never heard the institute holding any awareness seminar for the Articles – instead, the seminars for students always relates to ‘future opportunities’!

5) Clarifications from Institute

For all purposes, the clarification from the institute for any matter relating to students, would have to be got from the regional level. The articled assistant, in my experience, never receives any clarification from centre. Moreover, the Secretary of the institute never answers to any query – even if that seems urgent. I can only surmise that perhaps, the institute thinks that anything written from Secretary is in the nature of ‘policy’. So one would be wasting time, if one is writing to the Secretary.

If you have any queries or grievances – follow the procedure – first write to the usual address that is provuded ie. ero/cro/etc@icai.org. If one does not receive a reply within reasonable time (say 4-5 days) – write directly to the Deputy Secretary of the region. Even after that if you dont get a reply in a reasonable time – say two to three weeks – then write directly to the Chairman of the region or the members of the Central Council from your region. Use the last option only in the end – you would be amazed at the speed with which you would start getting replies. But you have to follow the ‘due process’.

Update (Feb 2010): ICAI has launched a helpdesk called e-samadhan. The link is: http://www.icai.org/help/ . The grievances posted here is given a “grievance number” by which one can check the reply to the query / grievance. ICAI gives a time limit by which reply would be posted – though it may not necessarily adhere to that time limit. But it does reply for sure and tries to solve the issue.

6) Filling form 108 / 109

The filling of report of practical training is the trickiest part. However, as per the institute – the number of days that has to be filled under various heads has to be net of leave taken. So the formula is Total Period of Articleship = Total Period Served + Leave Taken

7) Stipend during leave

As per the institute, the Articled Assistant has to be paid minimum of stipend stipulated even if he is on leave. However, there is no upper limit, if the Principal wants to pay more, s/he is free to pay such higher stipend even for the leave period. However, no stipend is payable for excess leave taken. Excess leave meaning leave over and above the eligible leave.

It is again a matter that there are principals who deduct from minimum stipend even if the article takes one or two days leave.

Moreover, there are Principals who would prefer to delay payment of stipend by three – four month, with the belief that the article will not leave them if they hold on to their stipend. The simple rule of the institute is that the stipend has to be paid regularly and in time.

There is another related aspect – though in this matter there is no rule of the institute for the Articled Assistants. It is of ‘Out of Pocket Expense’ (OPE). Simply stated OPE is sort of allowance given for expense or food or conveyance, when the article goes to onsite audit, whether within city or outstation audit. Good firms often compensate their articles with reasonable OPE. However, there are many others who would cut corners even here and try to subsidize their firm from the pocket of their articles by denying them such OPE.

8 ) Transfer from one Principal to another

One can take such transfer easily. However, the rule of institute is that one has to give a one month prior notice for it. Often, the Principal does not mind giving such release – but many times they do. That would really depend on the relation of Article with the Principal.

However, if one is in a real desperate situation and there are compelling reasons, the institute has the procedure where the Articled Assistant gives such notice to principal, and then fills the prescribed form and sends a copy to the Secretary – and within the prescribed time and with due process, the date of form filled by the Article is taken as the date of release from the Principal. However, this is again an untested rule.

Update: From April 2009, the transfer rules have been made very tough. The transfer can no longer be taken with “mutual consent” – but only under certain circumstances as specified by ICAI. Moreover, the Principal has now been given overriding powers on such matter. Details here

Update July 2010: ICAI has again relaxed transfer for those in first year of training. Now transfer in first year of articleship can be taken without restriction. Details at: http://indiapoint.net/ca/2010/06/15/ca-articleship-latest-changes/

Procedure of Transfer: For transfer of articleship from one Principal to another one has to fill form 109. The form is filled in triplicate. One copy is sent to Regional Office (RO) of ICAI, the other one is retained by the Principal’s office, and the last copy is retained by the Student. All the three copies are filled in original in pen. There are no carbon copies. The form sent to ICAI-RO is sent in a covering letter signed by the Principal. The RO in around two / three weeks time sends a letter of termination. The original is sent to the office of the Principal, and the copy is sent to the address of the student.

However, the student is not required to wait for the Termination letter and directly join the new Principal (even on the next day, if the new Principal is of the same city). While joining at the new Principal, the student will again have to do the same formalities as s/he did while joining articleship in the first instance viz. fill Form 103, 102, execute the Deed in Stamp paper. The only difference in the transfer case, the deed of articles shall be executed for the remaining period of articleship, and no fees is payable.

If one is taking transfer in the same region, then one will have to send the Form 103 to the same RO. If one is taking transfer to another region, then the student will have to send the Form 103 signed by the new Principal to the new RO.

After receiving the form 103 in case of the transfer, if the transfer is within the same region, then there is no problem as such, and the re-registration letter gets issued in normal course. However, in case of transfer to another region, the new RO on receiving the form writes to the previous RO, to transfer the file of the student. On receiving the student’s file from the previous RO, the new RO issues the re-registration form to the student. Usually in such cases of inter-regional transfer, there can be delays. In one of such inter-regional transfer from EIRC to CIRC, in my case, it took nearly three months for the file to get transferred – I had neither received the termination letter from EIRC, and off-course no re-registration letter from CIRC (as EIRC was not responding even to reminder letters from CIRC to transfer my file!) – eventhough I had joined the articleship in the new place. And, I had to pursue the matter right upto the Chairman EIRC. So, one should also keep ones documentation of transfer properly like even the Speed Post counterfoil – that helps one establish that the letter had indeed been sent and confirmation from Post office that the letter has indeed been delivered.

9) Position of the Principal / Member of the Institute

One of my previous principals would say – “the Chartered Accountants are like a tribe”. Simply stated, the institute would not listen to anything adverse by the articled assistant against his principal. Though there are various rules of professional ethics, even in worst cases where the case went upto high court – where the article complained that his principal is not giving stipend, not giving leave, making him work even on holidays – and there being documentary proof for it, the only punishment prescribed by the institute was a “reprimand” for the member.

So, for the would be article its better to study the person beforehand, under whom one wishes to take training. As one CA put it to me – “think again before taking up slavery”! (though in my opinion slavery is a hard word, but its equally true that some CAs prefer to lord over their articles rather than being friend /philosopher / guide)

10) Conclusions

It is very clear, that the institute has made very good rules for providing training. However, many of the members in practice openly flout these rules – and the articled assistant has no way out except to change principal or suffers in ignorance. And anyway, there is no way out against whims of ones principal.

The other problem is also the structure of training. ie many of the articles undergo graduation course – there is the pressure of the icai’s other eligibility criteria like finishing the computer training to be eligible for the exam. Often this training is available only at specified cities – and also that these training places do not abide by the institute prescribed rules of finishing the course in a specified days – so the article has to take leave on his own account to be able to do such training.

Moreover preparing for the CA exam itself is a huge task – particularly when there is no organised classes organised by the institute. And then there are all sorts of rumours floating of how the institute doesn’t want its articles to pass or some sort of fixed quotas etc etc !!! Also, many of the coaching classes have their own timing and hefty fees.

The Articled Assistant has to handle the office, handle studies, appear for exams without getting sufficient leave, go for outstation audits, attend institute’s training session, give explanation to his principal if he could not attend office even due to illness, attend to auditee’s whims etc etc. All these makes the articled assistant a full time harassed person. (Another way to look at it would be it prepares the trainee for a multitasking life ahead!)

Worst of all, except for token lip service, the institute does not take any serious measures against its members who provide dummy articleship. So, if someone is seriously doing articleship – there is another breed of articles who have taken dummy articleship – and attending coaching classes – so in the exams, such ‘dummy’ articles usually do well.

As, I read somewhere, it is only in their moment of madness that someone decides to take up the CA course!

Disclaimer: The rules relating to institute mentioned above are in force as on date of writing of this article. The page is updated from time to time. However, the rules of institute keeps changing from time to time – so one should check for the latest position with ICAI branch / BoS (Board of Studies) / helpline at http://icai.org/help. The other issues discussed relates to personal experience and observations.

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