What is articleship in chartered accountancy?
The CA Articleship serves as both a practical training program following academic completion and a compulsory requirement for attaining Chartered Accountant status at ICAB. Articled students are obliged to engage with certified Chartered Accountancy Firms during this period.
CA students have to complete the Integrated Professional Competence Course (IPCC) followed by articleship. Every CA student must undergo three years of articleship in a chartered accountancy firm. But students face the challenge of choosing the right firm. The firm they choose should fit the purpose of articleship.
It is challenging for a CA student to look for the right firm. In the same way, it is difficult for a firm to attract the right talent. The firm also has to take care of the expectations of an article working with them. CA firms are now spending more to hire competent talent and meet their rising expectations. You can manage this expense with business loans for chartered accountants.
Importance of articleship in chartered accountancy
The CA Articleship plays a crucial role in shaping the career path of a Chartered Accountant. Below are the key reasons why articleship is essential in the CA journey:
1. Practical experience: Articleship offers three years of hands-on work experience, invaluable for the professional growth of future CAs.
2. Time management: Managing a demanding schedule in CA articleship firms helps candidates refine their time management skills and handle various tasks effectively.
3. Professional skill enhancement: The training period enables individuals to develop key professional skills such as multitasking, team management, risk assessment, and client communication.
4. Exposure to real clients: During articleship, CA aspirants engage with actual clients, gaining firsthand experience in client engagement, understanding their requirements, and delivering professional services.
CA Articleship: Leaves allowed and working hours
CA articleship is a crucial phase in the Chartered Accountant training, and the Institute of Chartered Accountants of India (ICAI) has established clear guidelines for working hours and leaves.
According to ICAI regulations, a CA Article is allowed to take one-sixth of the total period they have served, excluding leaves. This amounts to approximately 156 days of leave over the three-year tenure, with a maximum cap of 180 days. It is important to note that this includes a minimum of three months of study leave specifically allocated for preparation for the CA Final exams.
As for working hours, Articles are required to work a minimum of 35 hours per week, ensuring substantial on-the-job learning. However, ICAI also restricts the maximum number of hours to 45 per week, to maintain a balanced work environment.
These regulations are in place to ensure CA students can fulfil their practical training requirements without compromising on their preparation for the final exam. It’s crucial for Articles to manage their leave and work schedule effectively to meet ICAI guidelines and succeed in their CA journey.
Scope of practical training/articleship
A prospective Chartered Accountant (CA) has the flexibility to select training areas aligned with their personal interests from a range of fields available in articleship. Some potential options for articleship training include:
- Audit:
- Auditing
- Tax Audit
- Bank Audit
- Statutory Audit
- Limited Reviews
- Stock Audit
- Insurance Audit
- Internal Audit
- SOX Audit
- ERP Audit
- Accounting and Consulting:
- Taxation
- Direct Taxation
- Indirect Taxation
- International Taxation/Transfer Pricing
- ROC Compliances
- Mergers and Acquisitions
- Filing Tax Returns and Other Certifications
CA articleship registration
Upon meeting the eligibility criteria, students are required to register for a CA articleship with the Institute of Chartered Accountants of India (ICAI). The registration process entails completing specific forms and submitting them to the ICAI. Here's a step-by-step guide to CA Articleship Registration:
1. Download Forms 102 and 103 from the official ICAI website. A fee of INR 50 is applicable for downloading these forms, even if obtained from the regional office.
2. Complete Form 102, the Deed of Articles, which must be executed on a Special Adhesive Stamp with the required amount and signed by both the Article and the Principal. Submit Form 102 to the Principal.
3. Fill out Form 103, the Statement of Particulars, with all necessary details. Sign the form and submit it to the ICAI for articleship assistantship. Along with the form, submit essential documents and the registration fee through a demand draft. The required documents include:
- IPCC or Intermediate Marksheet displaying passing marks
- Attested copy of the 12th-grade mark sheet
- ITT and Orientation Program certificates
CA articleship fees
To initiate practical training, candidates must submit Form 103 with a Demand Draft for the prescribed fees. If fees were paid during articleship registration, no additional payment is required. The Articleship Registration fee is INR 2000/-. The Demand Draft should be made in favor of "Secretary, The Institute of Chartered Accountants of India" and payable at Mumbai, Kolkata, Chennai, Kanpur, or New Delhi, depending on the region.
CA articleship late submission fees
In case Form 103 cannot be submitted within the stipulated 30-day period, a handwritten application explaining the delay should accompany it. This application, signed by both the Article Assistant and the Principal, is termed a Condonation of Delay. Additionally, a late submission fee must be paid as follows:
- Beyond 30 days: INR 100/-
- Between 31-180 days: INR 300/-
- Beyond 181 days: INR 1000/-
Upon submission of the Condonation of Delay application, the ICAI will accept the form without inquiry. However, in certain instances, the ICAI may request additional documents, such as the articles attendance sheet and the original Deed of Articles (Form 102) executed on Non-Judicial Stamp Paper.
Eligibility for CA articleship
Below are the CA articleship eligibility criteria and steps to enrol:
For Common Proficiency Test (CPT) students
- Pass Group I of IPCC or both groups of IPCC
- Complete orientation programme and 100 hours of ITT before commencement of your articleship
For direct entrants
Graduates with a major in Commercial Studies and a minimum score of 55% can enrol in a CA articleship. For enrolment, other graduates need a minimum score of 60%. To enrol, graduates can follow these steps:
- Register for both groups of IPCC on the Institute of Chartered Accountants of India (ICAI) website.
- Complete 35 hours of the orientation programme and 100 hours of ITT at any ICAI branch. You need to do it before commencement of articleship.
Post registering for a CA articleship, follow these steps:
- Complete General Management & Communication Skills (GMCS) during the first year of articleship.
- Complete the GMCS course after completing 18 months of your article training. Alternatively, attend 4 weeks of the residential programme on Professional Skills and Development.
- Complete Advance ITT course during the third year of practical training but before appearing in the final examination.
- Clear Group II of IPCC if not done earlier.
Expectations of a CA student from articleship
1. Tax assignments vs. audit assignments
Articles may or may not have a choice to decide the type of work initially. But with time and experience, you can involve them in your firm’s strategic aspects. Exposure to both audit and taxation would help the articles for a career in practice.
2. Big Four vs. medium CA firms vs. small CA firms
Articles have a choice between top CA firms and average CA firms. Usually, big cities are home to top CA firms. So, if the articles belong to smaller towns, they may have to relocate from their native place. Take care to make them feel comfortable in their surroundings. Articles usually choose smaller firms to get more exposure, while the bigger firms attract those looking for industry-best practices, higher stipends, and exposure to bigger clients.
3. Stipend as a parameter for decision
A high stipend is always appealing to the articles. It helps attract top talent. The stipend will determine if you will end up redoing work or getting it done effectively through the articles. Moreover, in the minds of articles, a higher stipend also improves their self-worth and their contribution to the organisation.
4. Adequate leave for exam preparation
This is the most critical call for most students. One must not forget that students require leave for exam preparations. Allowing articles hassle-free leave will boost their morale and give you intangible value as an employer.
5. Value addition to resume
Articles who want substantial value addition to their resume usually choose to join big audit firms. However, everything comes with its pros and cons. One aspect to be kept in mind is that an article would probably be working in the same department for the entire tenure. If possible, consider mixing it up for the articles. The articles would find their articleship to be more meaningful if they gain exposure to multiple facets of a chartered accountancy firm.
What happens during the CA articleship training
As students advance through their articleship, their roles and tasks may progress depending on their performance, the organization, and their training year. This progressive learning approach fosters a deep understanding of practical accounting aspects.
The CA articleship period serves as a crucial bridge between theoretical knowledge acquired in academic studies and real-world accounting applications. It equips CA aspirants with essential skills, experience, and exposure to excel in the field.
During CA articleship, students engage in various professional tasks like:
- Auditing: Participating in audit engagements, conducting procedures, examining financial statements, and ensuring adherence to accounting standards.
- Taxation: Assisting in tax compliance, preparing returns, conducting assessments, and staying updated on tax laws.
- ROC Compliances: Managing Registrar of Companies (ROC) requirements, including filing returns and adhering to company law.
- Financial Statements: Hands-on experience in preparing and analyzing financial statements, ensuring compliance with standards.
Best courses to pursue while undergoing CA articleship
Students often aspire to pursue additional courses like B.Com, CS, and others during their articleship. To do so, they need permission from the ICAI and must submit Form 112 within a month of starting practical training.
Balancing college and office duties can be challenging, but with effective time management, it's feasible. Explore the following top courses to undertake alongside CA articleship:
- CMA
- CFA
- LLB
- FRM
- ACCA
- Diploma in Information System Audit (DISA)
- Certified Information System Auditor (CISA)
- Certified Internal Auditor (CIA)
- Investment Banking
CA Articleship Forms Overview
Registration:
- Form 102: Deed of Articles
- Form 103: Statement of Particulars
- Form 112: Permission to Pursue Another Course with CA Articleship
Excess Leaves Deed:
- Form 107
Transfer/Termination:
- Form 109
Completion:
- Form 108
Conclusion
Articleship is the learning period of a CA student’s career. The experience which articles get during their training period is invaluable. Students often opt to register for articleship under a friend/ relative who is a practising CA. They do so to avoid undergoing training because of issues like getting leave approvals and relevant exposure. Hence, for firms to attract talented articles, they must first proceed with effective hiring practices. The hiring practices that help these budding professionals lay solid foundations for their careers.
Additional Read: How to use a Chartered Accountant Loan to strengthen your practice