History of Chartered Accountants

The Companies Act, 1913 passed in pre-independent India prescribed various books which had to be maintained by a Company registered under that Act. It also required the appointment of a formal Auditor with prescribed qualifications to audit such records.

In order to act as an auditor a person had to acquire a restricted certificate from the local government upon such conditions as may be prescribed. The holder of a restricted certificate was allowed to practice only within the province of issue and in the language specified in the restricted certificate.

In 1918 a course called Government Diploma in Accountancy was launched in Bombay (now known as Mumbai). On passing this diploma and completion of three years of articled training under a approved accountant, a person was held eligible for grant of an unrestricted certificate. This certificate entitled the holder to practice as an auditor throughout India.

Later on the issue of restricted certificates was discontinued in the year 1920. In the year 1930 it was decided that the Government of India should maintain a register called the Register of Accountants. Any person whose name was entered in such register was called a Registered Accountant. Later on a board called the Indian Accountancy Board was established to advice the Governor General of India on accountancy and the qualifications for auditors.

However it was felt that the accountancy profession was largely unregulated, and this caused lots of confusion as regards the qualifications of auditors. Hence in the year 1948, just after independence in 1947, an expert Committee was created?to look into the matter. This Expert Committee recommended that a separate autonomous association of accountants should be formed to regulate the profession.

The Government of India accepted the report and passed the Chartered Accountants Act in 1949 even before India became a republic. Under section 3 of the said Act, ICAI is established as a body corporate with perpetual succession and a Common Seal. Unlike most other Commonwealth countries, the word chartered does not refer to a royal charter, since India is a republic. At the time of passing the Chartered Accountants Act, various titles used for similar professionals in other countries were considered, such as Certified Public Accountant.

However, many accountants had already acquired membership of the Institute of Chartered Accountants in England & Wales and other Chartered Societies of Great Britain and were practising as Chartered Accountants.

This had created some sort of brand value and this designation inherited a public impression that Chartered Accountants had better qualification than Registered Accountants. Hence the accountants were very stern in their stand that the Indian accountancy professionals should be designated as Chartered Accountants only.

After much debate in the Indian Constituent Assembly, the controversial term, chartered was accepted. When the Chartered Accountants Act came into force on 1 July 1949, the term Chartered Accountant superseded the title of Registered Accountant. This day is celebrated as Chartered Accountants day every year.

Chartered accountants (Diploma holders in Accountancy in pre-independent India) played a significant role in India's struggle for independence by contributing their financial expertise, organizational skills, and commitment to the cause. While they weren't directly involved in the political aspects of the movement, their contributions were essential in various ways:

1. Financing the Movement: Chartered accountants were involved in fundraising and financial management for the independence movement. They helped in collecting funds for various campaigns, rallies, and initiatives by managing accounts, ensuring transparency, and maintaining financial records.
2. Sustaining Organizations: Chartered accountants helped maintain the financial health of organizations and institutions that were pivotal in the freedom struggle. They provided guidance on budgeting, financial planning, and efficient resource allocation to ensure the longevity and effectiveness of these entities.
3. Publication of Literature: Chartered accountants played a role in financing and managing publications that spread awareness about the struggle for independence. Journals, newspapers, and pamphlets needed careful financial management to continue operating.
4. Supporting Economic Boycotts: During the non-cooperation and civil disobedience movements, chartered accountants advised citizens and businesses on participating in economic boycotts of British goods, thereby weakening the colonial economic structure.
5. Advising National Leaders: Chartered accountants often provided financial advice to national leaders and organizations, helping them make informed decisions that aligned with the broader goals of the independence movement.
6. Safeguarding Assets: Some chartered accountants assisted in safeguarding assets and resources from being seized by the colonial authorities, ensuring that essential resources remained available for the movement.
7. Advocating Fair Practices: Chartered accountants promoted fair financial practices and accountability, aligning with the principles of transparency and justice that underpinned the struggle for independence.

While these contributions were not as widely documented as the political efforts, chartered accountants played an important role in the background, leveraging their financial expertise to support the overarching goal of attaining independence for India.

** Proud to be a Chartered Accountant **