CPAs and CAs: Partners in Accounting

                                                                                         

A CPA or Certified Public Accountant is a statutory title for qualified accountants in US who have passed the Uniform Certified Public Accountant Examination and have met the additional state education and experience requirements for certification as CPA.
In short, a CPA is a certified accountant of US.

A CA or Chartered Accountant is the title used by members of professional accountancy associations in British Commonwealth countries and some other countries. In India, a Chartered Accountant is a qualified and certified accountant.
There are a lot in common between CPAs and CAs.

Whether one is a CPA or a CA, the following functions are considered to be their domain expertise in respective countries:
1. Assurance and attestation function (also termed as “audit”)
2. Financial Accounting
3. Financial Analysis
4. Financial Planning
5. Tax Preparation and planning (including direct tax like income tax and indirect tax like VAT, customs etc.)
6. Management Consulting
7. Forensic Accounting
8. Venture Capital

As professionals of statutorily recognized bodies, both CAs and CPAs are governed by strict ethical standards which are almost identical, those are unique in the world of professionals.
With some much similarity, it seems CPA and CA can be used interchangeably (of course except the differentiation due to different nations & different national requirements)
In fact, with the convergence of individual accounting standards towards IFRS in both US & India both set of professionals will become really closer.
It therefore will not be wrong to assume that both CPA & CA can be partners in accounting.
What does it mean and what are the implications?
It means that the certified accountant of either country can look at both the countries as their work field and provide service to clients in either country by bonding with each other. With the increase in the bilateral trade between the two countries, this option in fact seems more of a necessity than an option.

In fact, a CPA need not wait for a multinational client to partner with a CA in India. With the advances in technology, outsourcing gives this opportunity to even those CPAs who choose to service small/medium businesses or individuals.
In fact, it would be of real advantage for a CPA to partner with a CA in India to take advantage of some strategic and geographic benefits available like:
a. India and USA are in opposite time zones. This means when it is day in US, it is night in India and vice versa. Because of this, any work assigned by a US CPA gets done on overnight basis by an Indian CA.
b. The education system in India makes English compulsory for most of the students and this ensures that Indians have the better capabilities than their other Asian counterparts as far as communication is concerned.
c. Because of the forex differentiation between the two countries, the CPA can get the work done by an Indian CA at costs that are relatively cheaper per US standards.
d. India has a strong democratic set up, flourishing for a long time and this makes it relatively stable compared to other Asian countries. Stability is a big concern as far as partnering in business is concerned.
e. The economic policies of Indian government are highly liberalized unlike other Asian countries and this allows businesses in US to invest freely in India. An open economy is always good when someone is thinking of partnering beyond one’s own national boundary.

Considering all the benefits available to a CPA in Indian market, it makes sense to partner with an Indian CA for growing business in US.

About the author:
Steve is a qualified accountant (Indian CPA) and co-founder of APT Services, the fastest growing outsourced accounting service provider in India. Steve has over 10 years of expertise in audits, accounting (both US & Indian GAAP), payroll and tax preparation services. For details on services provided by APT Services, log onto http://www.aptservicesonline.com

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