Why CPAs are required in India?

CPAs are Certified Public Accountants who after having passed a four part exam administered by AICPA and met work experience requirements, earn their title and license to practice in one of the 55 states of United States of America. CPA are accountants and trusted financial advisers for individuals and businesses and help plan and achieve their financial goals. Additionally one of the primary functions of a CPA is to provide assurance services, such as financial audit services whereby a CPA would attest that the financials adhere to US GAAP and are reasonably free from material misstatements.

While functioning or role of CPA is the same as an Indian CA, CPA is a profession that is recognized on a global platform. Initially when companies from the US and other global economies were established in India, they hired Indian CAs to meet the compliance requirements of SEC (Securities Exchange Commission of US) and security regulations of other countries. Even Indian companies with a global presence depended on Indian CAs to meet their global compliance requirements. Even though Indian CAs received ‘on the job’ training to produce financials as per US GAAP and IFRS standards, it was challenging for them to meet and keep up with the complex and changing requirements set by SEC.

This is where CPAs came into the picture. Qualified CPAs have knowledge of US GAAP and IFRS but also have the ability to lend credibility to the prepared financial statements and in meeting the requirements set by SEC. With the increase in F&A outsourcing (Finance and Accounting) to India in the recent times, the need for qualified CPAs has increased multifold. Currently CPAs are required in US Consulting firms that have offices in India (primarily big 4: Deloitte, PWC, E&Y and KPMG). CPAs are also required in multinational companies spread across various sectors of business. Last but not the least, Indian companies with US presence also need CPAs to prepare financials and provide assurance services according to US GAAP and SEC requirements.

The above trend is an opportunity for Indian accounting graduates to pursue a certification that gives global recognition and a lucrative salary base. Indian CAs are at a unique advantageous position to pursue CPA because they already have professional accounting knowledge . All they require is the credibility which they can achieve by writing the 4 part exam and getting the license.

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