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Story so far: During the week, I attend a meeting at the CA Institute where an otherwise routine agenda turns hot when somebody rose to ask if there were disciplinary proceedings instituted by the ICAI against the elected representatives on the governing council. To my dismay, there are only mutters, stares and shrugs but no clear answers.

Episode 88

Pity newspapers cannot stretch like Web pages, else I could have interacted with you last week. Yet, if you remember, the question I had wrapped up with a fortnight ago was simple: Does the premier accounting body have to ensure that those at its helm were free from ethical tarnishes? But what I thought of as `simple' wasn't really so is what I learn from the many responses lying in my inbox.

"Hi Swati," writes Kamal from Mumbai. "First of all let me ask you a simple question: Why do you want our professional colleagues — CAs — who are office-bearers to be questioned about ethics and other stuff? What made such doubt to come into your mind? Is it the recent R. S. Lodha episode or is it something else? If yes then please let us know. I don't think it is true that people who are on the panel of such premier institution have to be investigated or probed into for such recent media happenings."

My inquisitiveness was something quite general, maybe as a matter of policy, just as I would ask a candidate for driver post if he had any record of accidents previously. Recent happenings may have some role in stoking my curiosity, that's all.

"Dear Swati," writes M. Radhakrishnan. "There are lot of council members who want to become president, mainly to further their personal gains which can be achieved through such a post. Ideally the president has to ensure the growth of the profession through various means. However, the present generation (I don't belong to the older generation) wants to capitalise on opportunities for personal use. This is the general trend everywhere and our profession is no exception."

After those initial remarks, Radhakrishnan delves deep into ethics. "The meaning of the word ethics as per the dictionary is `the science of morals in human conduct, a moral principle or code'. (This definition of ethics was quoted in `The business ethics of JRD Tata' that appeared in The Hindu recently). All religions advise us to lead life in a moral or ethical way. "While, therefore, ethical conduct is essential for all human beings 100 per cent; however, leading such a life gains more importance for the educated, say, 110 per cent. If that human being is fortunate to attain the highest level of proficiency in a particular subject, to be called a professional then the importance of ethics is, say, 125 per cent. If that professional gets an opportunity to be in the institution which is the highest body of that profession than we can peg the importance of ethics at 150 per cent." That's quite some analysis! "Accordingly, the ICAI, is proud of the code of conduct it has laid for its members to follow in carrying out their duties, though the implementation leaves a lot to be worried. It is an accepted fact that the members serving in the industry have to ensure that every rupee is spent in a proper way and this has to be vouched by members who act as auditors. Therefore, it goes without saying that the governing council of the ICAI, whose members are expected to serve with highest integrity, should be without ethical tarnishes."

Interesting. "Let me end with a quote from Confucius: `To put the world in order, we must first put the nation in order. To put the nation in order, we must first put the family in order. To put the family in order we must first cultivate our personal life, we must first set our hearts right.'" No confusion about that.

"Dear Swati, all your fraternity friends are going to curse you for bringing out openly the tussles in the Institute," is how M. Thanga Velu advises me. "No professional will admit his or her mistake in the open, let alone in public. You know nowadays the office-bearer election in the ICAI is fought like political battle. CAs spend lakhs of rupees (whether the money is accounted is the important question) to become office bearers. Is it for prestige? No.

"Those days we elected the seniors and well-respected professionals amongst us for the top post and the rest were selected as office bearers. They guided us properly, ran the Institute sincerely so that the image of the profession is in tact; also they helped us address our grievances to the government, removed ambiguities, so that we can run our profession and life peacefully.

"When CAs started thinking that money mattered more than the ethics, the standard went down. By becoming office bearers you become influential. Power is the key word. You interact with big company CEOs, ultimately getting their accounts for your firm. If you open an investigation by an independent body, you will come across how many big clients were netted by the ex-office bearers during their tenure or immediately afterwards.

"Also, by coming closer to the government, there are chances for lobbying to become director of banks or PSUs. You make extra bucks in these positions. Auditors make more money in consulting than in auditing. US-like situation has already been created in India, and how many Enrons are going to vanish and how many Andersens are there to be exposed, time alone will tell. Presently money is the overriding factor. So if I help you to become office bearer with my vote and that of my friends, you help me get big audits — that is the bargain. If you talk of ethics they will say hell with you. "Finally, a word of caution! You are treading too many paths fast. You may be brought before the disciplinary committee for washing the dirty linen in public. But you are doing good national duty. May god bless you!" The whole debate about ethics looks like a rough terrain or a blind alley, I'm not sure, but your points should stir up some introspection. Thanks.

"Hai Swati, there is no doubt that those at the helm of affairs, whether it is an organisation or professional body, need to be free of ethical tarnishes," writes Anil Kumar Pillai from Kannur. "That's because we lesser mortals look upon them as role models. Code of ethics plays a vital role. It helps create guidelines for all. Ethical values are situation-specific and time-oriented. Nevertheless, everyone must have an ethical base. This is more so in the case of accounting profession.

"When they audit the accounts of corporates and vet financial statements, they are doing a noble service to all stakeholders. Just imagine a person with tarnished image auditing the accounts. Will we as stakeholders accept such a thing?" Straight question.

********

September 1 seems so close when I read about a week back that we are going to halve our import duties on some 80 items, as a result of the Indo-Thailand free trade agreement. I log on to the Net and search out the list in http://commerce.nic.in/thailand.htm. Annex-I talks of EHS, that is, `Early Harvest Scheme' and the items include fruits such as grapes and mangoes, wheat and salt, fans and air-conditioners, watches and gearboxes.

In a year from now, by September 2006, duty would be further halved and then reduced to zero. Current rates range between 10 and 60 per cent. A comprehensive duty-free regime is likely by 2010!

That evening, when leaving a mall after shopping, I turn to notice how a seller of local goods stands by without customers even as an adjacent shop with foreign goods has enough and more business. Will free trade be good, bad or ugly for our manufacturers, I wondered, though as consumers I'd be happy with quality stuff at the optimal price, wherever it is from? Is it yes-FTA, no-FTA or simply fifty-fifty? Send in your thoughts by Friday.

Swati_CA@hotmail.com

For archived episodes of this column click on: http://www.thehindubusinessline.com/nic/swati/index.htm

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