Do Marwaris and Jains Dominate the Institute of Chartered Accountants of India (ICAI)? Debunking the Myth

For decades, there has been a perception that the Marwari and Jain communities hold a disproportionate influence over the Institute of Chartered Accountants of India (ICAI). However, a closer examination of the facts reveals that such claims are far from accurate.

ICAI's Structure and Governance

The ICAI is a statutory body that governs the profession of Chartered Accountants in India. It is a non-partisan and non-communal organization that operates under the principles of transparency and merit. The ICAI's leadership and governance are determined by a council elected by its members, who are chartered accountants hailing from various backgrounds across the country.

Representation of Marwaris and Jains

It is indeed true that the Marwari and Jain communities have played significant roles in the Indian business and finance landscape. These communities have a long history of robust representation in the accounting profession. However, their influence should not be misconstrued as control over the ICAI.

While individuals from these communities may hold positions within the ICAI, their representation reflects a broader demographic rather than the control of a single community. The ICAI's elected council and its diverse membership ensure that the institute's leadership and governance reflect the profession's true nature and values.

Consolidation and Financial Statements

The statement made earlier about the control of more than 50% of the voting power and the preparation of consolidated financial statements (per AS-21) is quite misleading. The fact that Marwaris and Jains hold more than 50% of the voting power does not equate to control within the context of the ICAI. This figure simply reflects the existing distribution of shares among the community members.

The Institute follows Ind AS 110 for consolidation purposes. When the cost of investment in a subsidiary is less than the entity's share of the subsidiary’s equity at the date of investment, the difference is recognized in the capital reserve. This reflection of the bargain purchase indicates efficiency in financial management, but does not suggest control over ICAI policies or decisions.

A Personal Perspective

The anecdote about the aspiring CA, the familial connections, and the extended family of CAs might paint a different picture. However, this scenario is more indicative of the community's success and involvement in professional fields, rather than control over the ICAI. It’s important to differentiate between individual success and institutional governance.

Given the changes in the syllabus, the aspiring CA is indeed worried. However, it would have been more effective for him to seek guidance from his uncle who is a CA, rather than reaching out to an ICAI office multiple times. This incident highlights the value of personal connections and mentorship rather than seeking external validation.

In conclusion, while Marwaris and Jains have made significant contributions to the field of chartered accountancy, they do not control the ICAI as a whole. The institute operates under a transparent and merit-based governance structure aimed at ensuring the profession thrives, regardless of individual backgrounds or community affiliations.