The work an Articled Assistant is supposed to do can extend the whole gamut of work of CA. However his role is that of bringing the work to the Semi-Final stage. T he Final touch and
responsibility rests with the Principal. T he works that came my way were varied, and since I was fortunate to have good Principals (at least they were good to me) the work became
interesting. From the very beginning I was not just doing verification, but also been involved in making of reports.
Though Articleship is considered as training , it will give you a feeling of doing job
The Following is the experience of a Student who has completed Articleship
T he Accounting work can be at the client site or at the Firm Office. Such work usually involve recording the vouchers in the computer system – as CAs no longer do any manual
accounting. T he preferred software is T ally, though some firms may use other softwares as well. Also sometimes, the clients do not have their own accounting staff,and the CA is given an ‘audit’ assignment. In such situation, the CA has also to complete the accounts. T echnically this is not proper, as the Accountant and Auditor has to be separate, but ground reality is that
often CAs take a consolidated fees in the name of audit and also do accounts work for the client.
Audit means examination of the accounts. T his is the main work that CA as the auditor does. Often audit required going outstation to distant places, traveling by Bus, Car, T rain and staying in Hotels or Company Guest House. T his also involved working late at nights at client site / client office.
St at ut ory Audit
T his involves audit of the final accounts of the company – and is done once in a year. Such audit is considered prestigious, as those who go for such audits are well taken care of by the auditees. T his even involves Auditors (including Articles) being taken on sight seeing trips, proper lodging and boarding arrangements, and every questions being properly replied by the Auditee. However this work would often include finalisation of accounts, where the client / auditee would consult the auditor before closing the books.
Such statutory audits can be of any Company under the Companies Act or Banks (and Bank Branches), Insurance companies, Electricity Companies etc. Also, duration of statutory audit may differ from organisation to organisation. In some organisation it may take two – three months (which is a normal duration), in others it is done on a continuous basis
through out the year, while in still others like bank branches such audit has to be finished in three to five days ! I got opportunity to be involved in statutory branch audits of
Nationalised Banks, Insurance Corporations (both Life and Non Life), Regional Rural Bank (that time our firm was one of the Central Statutory Auditor of that RRB). T his was apart from statutory audit work relating to audit of different Private companies and and also a Govt Company.
Audit and Time Factor
In theory, audit happens after finalisation – in reality audit and finalisation happens concurrently (in fact now a days the concept of ‘pre-audit’ has also evolved). Audit and Finalisation takes time. But that time has to be shrunk within a given period. Consequently audit and night go together. Only when an account finalisation has gone upto 12 midnight – only then it is really finalised with satisfaction! On one occasion of outstation Statutory Audit of Bank Branch we worked till 4 AM in the morning and were back in the Bank at 10 AM for ‘next’ day of audit! In general wherever finalisation of accounts was involved and also in the tax audit season, 11 PM or 12 midnight was pretty normal. We often joked that every accounts person starts his work after 5 PM ! At times of internal audits that seemed to be a real fact. On one occasion of tax audit – the client who had a very tricky case and others had refused to take the case – came on the near last day. And at that time everyone was busy with other audit reports. So, when that day had already entered to 8 PM, my Principal called me and said
that the day would extend long ! He said if you want you can take an hour break, and we would take dinner together (that time, I was staying alone) and then “solve that case” ! At 9 PM he took me to a chinese restaurant ! And thereafter the three partners of that builder company arrived near 10 PM – and we worked upto 2 AM to ‘solve the case’. Dont think that the case was ‘fixed’ – but a pretty good scrutiny & adjustments were done – at times it is cases like these that really teach the fundamentals – and my Principal was the expert of Income
T ax !!
T his involves ‘real’ work and real learning. In a way, in internal audits, one is doing more work than the accountant if the internal audit assignment demands so. So, in one of the organisation where I was doing internal audit, and I was given its charge by my Principal, I would be checking accounts, Bank reconciliation (BRS), calculating T ax (Income T ax, FBT , Service T ax and State-VAT ), checking attendance, correspond with owners and managers, giving advice on Information T echnology, speak to their AMC guys and vendors, doing
cost estimation,suggesting areas of cost reduction or increase in price of their products. We would also check the EPF calculations, whether the payments to staff were being made as per requirements of the Minimum Wage Act of the State, and Payments relating to Professional tax and ESIC. So internal audit includes the whole gamut of functioning of an organisation or unit of an organisation. Another interesting internal audit assignment related to internal audit of the local branch of a Private sector telecom company that involved internal audit at different locations in two cities. After initial ground level exposure for three months (where my task was also to streamline the audit procedures to be adopted) I was given total reporting
responsibility – while other staff would go for the actual audit. Apart from that, these big companies use SAP (ERP) for their data – so I got exposed (though in limited manner) as to how SAP functioned. As such most of the data for audit purpose was extracted from the SAP into excel sheets that were provided to us in soft / hard copy as needed by us.
T he concurrent audit of banks is also a kind of internal audit. T he concurrent audit entails various dimensions of Bank operations like scrutiny of Loan Documentation, Checking of Bank Charges and Interest Charges on various Bank products, checking the information technology system including proper operation of computers, checking maintenance of various registers of bank securities (like Cheque Books, DD etc), Cash verification etc. As concurrent auditors, the Articled Assistant would be taken to the chest of the Branch, and have
to verify the cash ! T hey also have to check that proper security and safety arrangement of the Bank exist. We would even get the siren of the Branch tested – whether that was working !
Stock audit assignments can come from Banks, or from Commercial organisations in FMCG sector, among others; and even local businesses can engage the CA for stock taking. Stock Audit work can also come from organisation who maintain large depots of inventory
Sometimes, Banks also engage CAs for doing Stock audit of clients of Banks who have taken huge loans. T his is again very interesting, as here one is looking into the documentation in extreme detail and getting exposure in areas like, how much stamp paper is required to be put in a mortgage and in hypothecation ! And this is apart from verification and estimation of stock and checking that with accounts. T he kind of stock audit assignments I did were related to building material stock, quantity of grain sacks (huge quantities in warehouses), oil stock, stock of steel, stock of goods at FMCG warehouse and similar assignments like library book stock and furniture stock (though from accounting perspective the last two were
not really stock for the entity but part of asset, but my Principal got them as verification assignment) . During one of the Stock Audit of warehouse, I had to travel nearly
600 kms in interior of MP by road with the company officials on 1st April covering 6 depots on a single day! I started from Jabalpur at 6 AM on Bus to reach the first depot – from there the Company officials took over, and the audit lasted till 11 PM in a remote Naxal afflicted area – the night I spent at a hotel where the company office was, and next day, I took the first bus back home ! In this particular assignment, since my Principal had put the complete reliance on me, I had to be extra careful with working notes and documentation.
T ax Audit work is an interesting area of audit, where the issue transcends to a higher level of not just verification, but verification from the Income T ax point of view. In a way its complete scrutiny of the accounts. Often, the CAs who have tax audit and tax work of the same client – there is a chain built up – the audit staff, the computation staff, the tax return preparation and filing staff. T he Articles can be assigned to any of these works depending on his abilities. T ax Audit work forms a major part of work of CAs, and often
during the T ax Audit season, 10 PM is normal – and in certain occasions, I worked even till 1 AM ! Of-course such work were interesting and gave a deeper insight into interplay of accounts, tax and audit procedures.
Revenue audit is also a form of internal audit, but from the specific purpose of finding revenue leakages. Usually such revenue audits are undertaken by banks and other commercial organisations like Electricity Utilities. I did revenue audit of different branches of banks at different locations. T he interesting thing in such revenue audit I found – that as a thumb rule, the CAs prefer to find at least that amount of leakage that equals or exceeds their fees! T he moment that much amount is found, it is (generally) considered that the revenue audit is over ! As such, bank revenue audits may last one to two days max. As such it seems to me, that revenue audit is more a creature of the manual accounting records. T he more the penetration of computers in works of banks and other organisations (and their control from centrally located servers), the chances of mistakes and revenue leakages gets drastically reduced.
T his relates to audit of input and output registers and vouchers of the client. T his audit relates to the State VAT T ax laws. During my time of articleship, VAT audit had become compulsory in WB – but not in MP. So whatever VAT audit I did, it was as per WB state laws. One such memorable VAT audit related to an exporter of minerals. It was an interesting interplay of checking of bank documents relating to foreign exchange and accounting record among others.
T hese are interesting assignments, where the CA is given the task of investigating certain issue. I did one such work, where the organisation had made large payments for some contract works, but were unable to find properly if the work done, money charged, and the amounts, were as per contract. T his was because the staff had changed over time. We did the work, checking the contracts, finding the provisions, pulling out all the old papers, putting through reconciliation and were able to pin point to the last rupee the excess payment made !
Other Kinds of Auidts
Such audits related to audit of PF T rusts which took me outstation to places like Dhanbad and Kolkata. One of such PF audit also came due to order of Court, where the entity was required to get its PF account books audited. T hen there was audit like those of local NGOs and also Branch of Accounting Bodies like the local ICWAI branch.
Drafting of Certificates and Reports
Often clients may come who need ‘Net Worth’ certificate. Such certificate may be required for Bank purposes or getting Visas for visiting other countries. T he Article may be asked to check the documents and draft the Certificate. Of-course he can refer to previous certificates issued by the CA. Also, there are on occasions the CA has to issue Certificates relating to Income T ax etc. However such Certificates under T ax laws come in standard forms. Apart from above, Articles with some experience or those in their final year are often engaged in drafting of Audit Reports. T his has to be done carefully and with all sorts of checking of schedules and annexures. Such work requires much care and is pretty involving and gives a huge learning experience. Also, in audits one can see diverse interests at play as everyone wants a ‘clean’ report and the CA has to be really tough to put in his objections. In such matters I was really fortunate to have worked under CAs who were tough – at least one of them was really tough and would not compromise on facts.
T ax work is different from the T ax Audit work. T his involves computation, preparation of T ax return, and its filing. Often, even Lawyers do the T ax work. Or sometimes, the CA can get outsourced tax work from other Lawyer or other CA who either do not have time, or who do not have the expertise or infrastructure. T ax work also invloves preparing forms for application for PAN and T AN numbers.T ax work may relate to income tax, central excise, service tax, customs, state VAT etc.My exposure in tax work primarily related to
Income T ax and Service T ax, and very little in Central Excise and VAT , and no exposure in Customs.
Tax Computation Work
T his requires calculation of tax on behalf of the client. Sometimes, there may be requirement of knowing the tax provision of previous years as clients may get arrears etc. Usually knowledge of past two years, current year, and next year tax provision is a good basis for properly doing this work. Some CAs may also use tax softwares for doing the computation work. T his also requires on part of the Articled T rainee knowledge of computers, and also quick learning of computer softwares. Tax Ret urn Filing Work Depending on nature and requirement of client and T axation Provisions, the CA may decide to file the return manually or efiling.T his preparation of return requires extra care – as for example even a
small mistake in the quoting PAN may lead to a penalty of Rs. 10,000.Wrong computation may lead to over or under payment of tax.Also on many occasions, the client would give an estimated amount to the CA and ask him to deposit the money on his behalf. T his involves proper preparation of challans for depositing of tax. Some CAs take due care in checking the challans and returns themselves. However in bigger firm the staff / Articles may be on their own, and are pulled up only in case of mistakes. In one of such firm, the CA gave heavy firing to one of the staff, when he deposited IT Challan of Rs. 6000 instead of depositing FBT Challan for that amount. T he particular staff had asked me what challan is required for
depositing tax – and I assuming that it was income tax had told him the particular challan! I of-course had my explanation and was saved – but advised that next time I should enquire what kind of tax if someone asked me for that!
T his relates to the deduction of T axes by the clients of their staff and of other payments. eT DS also includes eT CS. T his is interesting work, but becomes very tedious at times. One of my CA at times would get eT DS work of organisation having more than 2000 deductees at times! Such returns are quarterly returns.
Case Preparation and Assistance in Representation Work
T his is really an exciting area where the knowledge of tax, case law, drafting work all comes to use. T his is an area where Articles are rarely involved, but my ability of putting proper words at proper place, helped me in getting such assignments, where I would make the initial draft, and later on refine that under guidance of my Principal. In another firm, I had single handedly prepared the draft for my Principal who was facing Service T ax demand after the audit by Service T ax department. My reply was 95% accepted by my principal as it is, with only minor changes in certain words. And the most satisfactory thing was that the Principal’s perspective was accepted by the Department, and he did not have to pay any tax as demanded. One of my Principal (during early days of articleship) also took me to IT AT case hearing where he was representing his client.
Management Consultancy Work
T his is in a way residue work – but important. In a way the things that do not come under Audit and T ax gets classified as Management Consultancy. Preparat ion of Project Report s for Bank Loans T his is an interesting work, where one has to put to use all that one has studied (or would study) in papers like Financial Management. T hese are projections that the client has to submit for getting loans.On occasions, the Article may even be asked to fill the loan application form and all its columns. A good knowledge of FM and Excel helps. Sometimes, CAs use softwares for preparing such reports. However in my case it was excel that was used. Sometimes custom excel sheets can also be used.
T hese include formation of Companies, drafting MoA & AoA, and filing of company returns. Also applying for DIN is a normal work relating to ROC. Infact, while doing such work, I ained confidence in using internet transactions using Credit Cards and also internet banking. Prior to such exposure I would be scared of using internet for the transactions. However in MCA work, use of internet for transactions become very convenient. Sometimes, the CA may also be engaged for secretarial works like maintenance of registers as required by the ROC.
T here is a whole field of works under the MCS (management consultancy services). T hese can range from preparing Memorandum for creation of NGOs, registration of AOPs, registration of Partnerships etc. Sometimes, works like Asset verification may as well come as an outsourced work to be classified under MCS and not audit! Works relating to filing of returns relating to EPFO also comes under this. On one occasion, I had to prepare complete documentation of the client for sending to Banking Ombudsman. While I got opportunity to
work in all these mentioned areas, I did not get any exposure in due diligence /valuation /M&A etc works. Information Technology Related Works T his is interesting work for those who are good at computers and programming. One such instance was that my Principal was engaged by client for maintenance of Salary Record. By implication that meant preparing of Salary registers, and proper deduction of professional tax, EPF, T DS and generating Salary Slips. We discussed the matter, and I programmed the excel sheet where just by inputting the number of days for each employee, the whole calculation would occur automatically. In that I also used Access for generating the salary slips for the employees. And in such cases, there can be no greater satisfaction, than to know that the same salary payment system is being used still today.
Attending Seminars and Conferences and Student
Activities My Principals would let me attend Seminars and Conferences organised by ICAI and T ax Bar Associations. One of my Principal would also take me to different Seminars of
Income T ax – and on certain occasions he himself would be the speaker – and I would be assisting him in presentation. In some instances, he would even take me with him, without requiring me to pay the fees ! I also participated in Student activities of ICAI, and even got first prize at the local branch for elocution and represented the branch at the Regional level. All these were really a great experience. Inhouse Updat es One of my Principal would keep updating his clients & employees in form of Pamphlets. So, I would be given the task of writing these inhouse pamphlets / handouts. T hese would be mostly related to Income T ax and would act as quick reference for employees and also for keeping clients updated.
Generally, in the Firms that I worked during Articleship, there was a clear distinction between the Employees and the Articles. One of the Firm would even give sort of preferential treatment to its Articles. But another one where I served for a brief period, there was no distinction as such. Consequently, in such firm, while the employees worked 8 hours +, even the Articles were putting in 8 hours + every day! But in the other two, the Articles were put under a clear 6 hours work everyday (excluding lunch hours). In such firms while the Employees
and also the Principal would put in 8 to 10 hours + everyday – that was not demanded from the Articles. But where there is well trained staff (employees and Articles), work would get finished quickly and there was even occasions in one of the Firm where during T ax Audit season, the office would close by 5.30PM – no late hour working! T his even once prompted my Principal to comment that the firm was “becoming a British Firm”! For anyone who is new to this field of Chartered Accountancy, the initial office experience can as well be a bit shocking. One can see office politics at work – which can at times be very bad. When I had initially joined training, in the very first week, I was sent for an audit on the outskirts of the city. One of the older employees was accompanying me. When we reached back to office we were asked why it took so long – and he was quick to reply that it took time at
Anup’s residence! In reality, he came to my residence and parked his scooter at my place (my residence was on the way to that place), and we went on my scooter! T he audit work finished in two hours – but he was not willing to go back – and would pass time in the auditee premises – and would tell me that if we went back that fast, then we would be given other works to do at office! So, while we could be backat office by 1PM, we went back to office at 5.30 PM ! Since he was an ‘old hand’, I could not override him, and during those days I did not
possess any mobile!T here were other kinds of employees at office – who would pride themselves as to how they fooled their boss! In one of the firms, an employee once told me, that the boss had sent him to an audit – and as he told me – there were so many vouchers – how was it possible for him to check all those vouchers… so what he did was he removed
seven- eight vouchers and tore them away (!)… and later reported to the boss that in his audit – he did not find those vouchers! Other things, I have seen during articleship is things like casteism at office – brahmin vs non brahmin kind of thing. T he student should be beware of all such things – and try to have professional and ethical attitude at work place – and not get influenced by what s/he thinks are wrong practices. Also the atmosphere at office is also determined by attitude of Principal. So in at least one of the places there was pretty good relaxed
office atmosphere – and I would even play radio on internet! Whereas in sharp contrast in another place music was strict no!
T he first firm where I served briefly would officially close office on Gazetted Holidays, but would call meetings on such days! In the second firm (in WB), the Principal told me that I could take holidays on Gazetted Holidays or follow the General Office Practice of taking a consolidated 15 days holidays during the Durga Puja (Dussehra). My third Principal clearly told me that he cannot provide for the Gazetted Holidays and one would have to attend office even on those days. So notwithstanding what ICAI said about the Gazetted Holidays the
practice of firms differed.
Reimbursement of Expenses
T he concept of “Out of Pocket Expense” and “Petrol Expense” was there in all the firms. T here was no fixed rate as such – and it depended from audit to audit.The kind of Out of Pocket expense I received from time to time were:
1) Outstation audit: Rs. 250 per day with all other expenses paid (ie. travel, lodging & boarding)
2) Outstation audit: Rs. 250 per day inclusive of all expenses
3) Outstation audit: Rs. 100 per day with all other expenses paid
4) Local audit (15 kms distance): Rs. 75 per day petrol expense
5) Local audit (3 kms): Rs. 500 consolidated (on first month only – but not thereafter!) ( however this firm had practice of giving Gifts to
its Articles and Employees on Diwali – and these Gifts were pretty good to be of use even till now !) So there is no hard and fast rule in firms regarding this. It depends on
nature of work and the fees. Some firms may not even reimburse all expenses – as one of the (Kolkata based) firm where I went for interview prior to articleship – the managing partner told me that while they would reimburse certain expenses – there can be net outflow from my pocket!
T his is an important skill that the Article T rainee should develop. Some CAs do let their Articles to directly come in contact with their clients, while some others do not let such direct contact to happen. It really depends on the CA as well as the Article. One of my Principal would on certain occasions consult me on how much fees should be fixed for certain kind of work! Client Handling is a soft skill that helps the Article come to realities of the Profession – as to what the requirements of client are, the nature of work, the objectives of work
– all these needs to be understood properly and communicated to the Principal or properly recorded in writing. Having worked in different firms, one could see different perspectives
at work. One of my Principal would be happy to do the work at the earliest. So, if it seemed to him that the work could be done in an hour, he would ask the client to come back in three to four hours to take the papers. In contrast another of my Principal for the same work would say that it would take at least two to three days. While the former Principal had the philosophy of not keeping any pending files at table,the latter one would say that the client should understand the importance of the work – and if the work was provided to him quickly,
he would think that the work did not have any ‘importance’ or did not require any mental aptitude – and that would affect his fees !
Audit at Client Site
Initially it seemed interesting, and later it became usual – to whichever client site we went, we were taken care in terms of snacks / lunch, sightseeing, visit to places like museums, small gifts/ memorabilia etc. T his happened nearly in every audit assignments. Apart from this during statutary audits, initially it was bit of amazement when even Bank Managers and Senior Managers would say “Sir” to me – this can be pretty heady initially – but one should be able to handle such things in professional manner – without such things getting into head.
However, one thing that was pretty shocking initially – particularly during onsite audits was the drinking and smoking. Infact, myself being a teetotaler, it was pretty much a shock as in any big audit assignment, invariably (with few exceptions) one of the routine offerings was a drink! And I had to keep refusing it – and people, including one of my Principal would initially try to persuade me that I should take the drink! But then, CAs differ – while one of my Principal was a heavy drinker another was a non-drinker and would even carry his water bottle with himself on audits! But then both were pretty good at their work – and one learnt different things and different aspects of human behaviour.
File Handling and Documentation
T his is a very important part of the office management, and the students should be properly aware of these. Some firms do not let their articles to touch the files directly, instead they keep one employee specially for such work. However in others, it is an open system where the CA lets the Articled T rainee to access files. T he student should keep the trust of his Principal and not misuse such information. Also for each work done, the Student should make proper notings in the files and keep the documentation up to date. T his is because often