Chartered Accountancy in Nepal: Beyond the Paycheck
The Chartered Accountant is one of the most prestigious professions in the world but in Nepal, this profession has more often been misunderstood. The frequently nagging question is: What does a Chartered Accountant actually do? More precisely, the centric of attention is drawn towards the salary of a C.A. rather than understanding the job responsibilities, the career pathway, or the real challenges involved. While the financial rewards are indeed massive, it is really a journey of toiling and striving to become a C.A. in Nepal.
If any of you are eager to learn about the route leading to becoming a Chartered Accountant and whether the effort is really worth it, then this article will take you through everything about the Chartered Accountancy profession. Let’s look in detail at the career of Chartered Accountancy, what it takes to get the title of C.A., roles played by them, and the wide career options that come along with the title.
Now, let’s leap into the world of Chartered Accountancy and see what exactly makes this profession so exciting and rewarding.
The Ancient Roots of Accounting: It’s Older Than You Think!
Accounting in its early forms can be traced back to Mesopotamia, where ancient traders used to record their store of goods and livestock. Early auditing systems came into being in ancient Egypt and Babylonia. Around 300 BC, the first professional accountants started working in Iran, and the Phoenicians even came up with the first alphabetic bookkeeping system!
It wasn’t until the 15th-century arrival of Luca Pacioli, an Italian monk and mathematician, however, that we can truly say that modern accounting was born. Pacioli is often referred to as the “Father of Accounting” for his development of double-entry bookkeeping, which is still today the foundation of accounting.
Whereas accounting has evolved over time, the underlying principles enunciated by Pacioli are very much alive and well to this date. And that’s the foundation of Chartered Accountancy-a profession which began in the UK but is today practized all over the world.
Chartered Accountancy in Nepal: A Relatively New Profession
Although Chartered Accountancy is one of the world’s oldest professions, in Nepal, it is a relatively new profession. The Institute of Chartered Accountants of Nepal (ICAN) was established under the Nepal Chartered Accountants Act, 1997. Before that, the profession was governed by the Association of Chartered Accountants of Nepal (ACAN), which was established in 1978.
ICAN has been authorized to regulate and oversee the practice of Chartered Accountants in Nepal. The first CA exam was held in Nepal in 2000, and thereafter, the profession gained momentum with an increased number of students opting for a career in accountancy. Today, the CAs of Nepal command a very respectable standing in the field of taxation, auditing, financial management, and business advisory services.
What Does a Chartered Accountant Actually Do?
So, what does one expect when one becomes a Chartered Accountant? Contrary to the general belief, the role of a C.A. is not restricted to signing of financial statements or drawing a fat salary. Actually, there are tremendous opportunities which this profession offers in different sectors. A CA is mainly involved in the following areas:
Accountancy and Auditing
Auditing is one of the major roles that a Chartered Accountant plays. It is basically an exercise done for checking and verifying the financial records that an organization keeps regarding legal standards and accounting principles. By auditing, a C.A. gives assurance to all stakeholders, such as investors, creditors, and regulators, that the financial statements presented are valid after verification.
Taxation and Tax Planning
Chartered Accountants play a very important role in tax management, and provide services in the field of tax planning and compliance matters for individuals and companies, including representation before the tax authorities. A C.A. will be able to give much-needed advice on reducing tax liabilities and optimising tax strategies.
Management Consultancy
Many business houses hire C.A.s as consultants for devising an ideal financial management system. These may include budgeting, cost control, designing accounting systems, and advising on resource utilisation. They help the firms to streamline their operations and increase profitability.
Cost Accountancy
C.A.s advise the firms concerning cost management and price fixation. This is done so that the firms can maintain a check on their production costs, price their products appropriately, and budget accurately.
Corporate Governance and Financial Advisory
As a C.A., one may be included in the company’s board of directors or as the secretary of the company. This, therefore, helps in financial decision-making and strategic planning. You might also advise on mergers and acquisitions, among other high-level financial transactions.
The Road to Becoming a Chartered Accountant: The Journey Begins
Now that you know what a C.A, let me tell you how to become one. The journey of becoming a Chartered Accountant in Nepal is long but highly rewarding. It’s divided into three levels.
CAP-I: Building the Basics
The first stage, the CAP-I level, deals with the very basics: accounting principles, law, economics, and business mathematics. It is a six-month course aimed at preparing individuals for higher, more demanding stages.
CAP-II: The Actual Exam
This is where things get serious. The most grueling part of the entire journey is in CAP-II. Only 5% of students make it out of this level; thus, this is generally where most students struggle the most.
You’ll study advanced accounting, auditing, corporate law, taxation, and financial management. Expect long study hours and a lot of hard work. But don’t worry those who make it through will be on the path to success!
CAP-III: Accumulating Practical Experience
Once you pass the CAP-II test, you enter CAP-III-a theoretical and practical training program. You will be attached to a recognized firm where you will learn in-depth auditing, tax planning, and financial reporting. It is an important stage for the implementation of all that has been studied.
Chartered Accountancy vs. ACCA: What’s the Difference?
Though both Chartered Accountancy and ACCA are reputed professional qualifications, there are some key differences between them, including:
Recognition and Scope: While generally, CA deals with the national scope of accounting standards, ACCA is an internationally recognized qualification that operates under international accounting standards.
Exams and Flexibility: ACCA exams are more flexible, and one can take the exams at intervals. CA exams are not that flexible; it has a clear structure and timeline.
Career Opportunities: In Nepal, CA is more specialised, while after studying ACCA, students can be assured of global career prospects, especially in multinational corporations.
Salary Potential: How Much Can You Earn as a C.A.?
One of the most frequently asked questions is: How much does a Chartered Accountant earn? In Nepal, an entry-level C.A. gets paid anywhere between NPR 40,000 and NPR 60,000 a month. However, for experienced C.A.s, especially those who own their private firms, earnings could go much higher depending on the number of clients and the size of the practice.
In fact, globally the remuneration prospects are much better. Countries like Australia fetch around AUD 43,500 to AUD 61,233 for an entry-level C.A. per annum and AUD 95,000 to AUD 123,000 as experience increases.
Conclusion: Is the C.A. Journey Worth It?
Becoming a Chartered Accountant is an troublesome journey wherein one requires nothing but the best in terms of dedication, patience, and continuous learning. The journey might be tedious; however, its returns for a good career are lucrative: job security and professional growth. If you genuinely like finance and put in effort, then the long-term benefits are well worth it.
Here is the more detailed video on Chartered Accountant (CA), created by Consult Nepal. Watch the full video for an in-depth understanding of the Chartered Accountant profession.