ICSI Vision 2022-my views

The usual practice of newly elected heads of professional bodies(ICAI, ICSI, ICWAI) is to host conventions in their home cities, go globe trotting, and try to leave their imprint on the institute in the short 1 yr tenure. However, the dynamic ICSI President Dr Shyam Lal Agarwal is an exception. He has updated the Vision 2020 document to Vision 2022. Here are my views on the salient points(do read it here https://www.icsi.edu/webmodules/Vision_New_ICSI_2022.pdf

Overall a motivational read.

The Good

• Disruption Realization: Art of reading, interpreting and understanding the law is more important than studying a large number of laws;..It is expected that the routine and procedural matters will be automated with the support of technology. Therefore, focus should be on value- added areas, like advisory, advocacy and strategic management. 
• Asset Light: More and more emphasis should be given to create IT and digital infrastructure instead of physical infrastructure;
• Governance starts with Self: Performance evaluation of the Council and its Committees, President, Vice-President, Council Members and Secretary may be introduced;
• Speakers for national convention:Speakers should be invited keeping in view their expertise and exposure to the subject(and not on their PR value :D)
• Research Repository: Maintaining a data base of various research papers carried out including published and unpublished papers, project reports submitted by members and students during the course of their training. Secrecy of info would be a challenge but manageable via black out of information
• Specially designed Refresher Courses may be organized for members to be undertaken every five years for updating their knowledge and skills.

Business as Usual/Expected

• India focus: Research on origin of Corporate Governance from Indian ethos should be carried out, documented and given wide publicity
• SMAC:There should be a standard format for obtaining feedback on every professional development programme. The possibility of obtaining instant feedback through Mobile App may be explored;
• SME: The members should be encouraged to seek employment / practice opportunities in the SMEs and small cities also

The Bad

• undertaking sponsored research: How does this ensure autonomy? 
• The concept of ‘Senior Company Secretary’ may be introduced, on the lines of ‘Senior Advocate’ in the legal profession, to provide distinct status and recognition to the experienced members. The Senior Advocate concept is not a desirable one for clients and is an indirect advertisement. Is this really necessary for a self regulatory body?

Divided you fall-and other lessons from the fall of ICAI, ICSI and ICWAI/ICMAI

When the Companies Act 2013 was in the draft stage, the 3 professional institutes ICAI/ICSI/ICWAI were fighting over how to divide the supposed pie of the additional statutory rewards available, be it designation of their members as key management personnel, pre-certifications, expanding the number and scope of audits etc. Institutes did know which side their bread was buttered, with none daring to offend those in power by analyzing the RIL gas pricing controversy or imported coal based tariff pricing controversy, even though atleast two of them-ICAI and ICWAI-had relevant expertise of the same. Nor did they fight against public waste or corruption or monitoring their members. Now the birds have come home to roost.

ICWAI Initially in Dec13 with the notification of the draft cost audit rules, a storm broke out in the cost accounting professions when it was realized that the scope of cost audit/cost records has been narrowed. At that time, ICAI and ICSI maintained silence on this aspect, with ICWAI left to fight its own battle on the very future of its profession.It postponed its national convention and other events, and focussed on the battle at hand.  In its technical reply to MCA on the rules,
http://www.icmai-wirc.in/assets/pdf_files/WIRC%20Feedback%20final%20PDF.pdf
 WIRC-ICMAI observed that It must be remembered that once the dilution of audit process starts taking  place, it will percolate to all other audits which will be self-destructive process for the Regulation. The institute also gave a more detailed representation where it reiterated the merits of the profession in layperson's language http://www.icmai.in/upload/Institute/Updates/Draft-Rules/Letter-Suggestions-to-SecyMCA141213.pdf
But the representation was in vain, and the final rules notified in Mar14 remained unchanged, and will until the next government is sworn in. But that was not the end of the tale!

ICSI In an ambush, the MCA notified final rules relating to company secretaries requirement and certification, which at one stroke removed the need for wholetime CS/practising CS for most private sector companies! The ICSI was caught unawares, and indeed members and students immediately began protests and agitations. As per the ICSI press release justifying why the Vice President remained at the ICSI office.'A large number of members and students have assembled at the Institute premises at Lodi Road on 4th April 2014. Three of the members were continuing their hunger strike sitting within the Institute Premises. There were agitations at other places all over India on that day. The Police was finding difficult to control the situation, particularly at Lodi Road Office. The ICSI officials rushed to Ajmer to meet the minister who was campaigning, but got little reassurance. They met the MCA officials but got a mixed reply, and indeed pointed arguments about why the change had been done. Despite ICSI's reasoning, the MCA had sharp rejoinders as follows https://www.icsi.edu/Portals/0/MOM.pdf
(a) ICSI stated  about many company secretaries who had received notices of termination of their jobs from the companies who are not too keen to implement governance norms. MCA officials replied that Employment is linked to business cycles in the economy. Government does not guarantee job or work to doctors, engineers, lawyers or any other professional
(b) Regarding that  there is total disillusion among students who have enrolled to the course based on the w
ork  opportunities available..which  have been taken away all of a sudden, MCA said that Institute must plan its intake of students and focus on their quality rather than having anybody and everybody walk in. This is something similar to Government of India’s intake into various services
(c) Regarding the general work demands, the MCA stated that profession must earn its reputation and employment is based on merits.  It should not depend on Government/MCA for ensuring that students/Members of ICSI will obtain employment
(d) To the ICSI's plea of helping in corporate governance, the MCA explained its rationale for dropping precertification on the errors observed by it stating that Assignment of pre-certification of e-forms is government’s expression of confidence on both CAs and CSs on certification matters. However, the quality of certification has been disturbing..A letter in this regard has been sent to President ICSI and ICAI

ICAI Recently, the Competition Commission of India(CCI) found prima facie that .. the choice of the consumer (members of OP) in this case was being limited. The members of OP had no option, but to attend the seminars organized by OP (whatever be the quality of seminars) to get the requisite CPE credits and ordered an inquiry into the restrictive trade practices. If this practice is stopped, then ICAI/ICSI and ICWAI will lose their revenues from seminars, and office bearer's powers/recognition will reduce. Indeed the quality perception of CPE events is itself a wakeup sign for the member services section. like I'd blogged earlier http://andy161.blogspot.in/2014/01/does-mandatory-continual-professional.html    Those interested in the CCI order can read it here  http://www.cci.gov.in/May2011/OrderOfCommission/261/932013.pdf
Also, limitations on audit number in Companies Act 2013, has not gone down well with ICAI since this will make the potential income of members lower

I may be writing a premature obituary of strong and independent professions but I think the writing is on the wall. Without statutory barriers to entry and 'reservation' in professional work/employment, CA/CS/CWA must compete in the open market, often for deskilled jobs in KPOs, shared services and entry level jobs. Hence, to avoid a repeat of the loss in recognition etc following lessons may be insightful 
1) Quality should return to the profession-for example precertification w/o errors
2) True professionalism in training(articleship readily accessible to all, with a high standard of training) and
3) Not depending on statutory work as an essential one but making members ready for service too or to enter new fields like internal audit that is open to all. Indeed, ICWAI had released a slew of internal audit draft guides for public comment on telecom/power etc
4) Respecting other professionals-if ICAI, ICSI and ICWAI had presented an unified front, I doubt MCA would have made these many amendments.
5) Reaching a particular standard and then expecting rewards-Increasing compliance costs of cost audit, secretarial certificate etc w/o adding the intended value is not fair, and that is why India Inc fought back and got ICSI/ICWAI cut down to size..since ICAI is well entrenched, few CFOs/businesspersons would fight ICAI!

CIMA 2015 professional qualification revised syllabus-some interesting insights for Indian institutes

As a final exam passed student of ICWAI(Indian equivalent of CIMA), I maintain an interest in management accounting and related matters. Hence when I read in the CIMA Insight February 2014 issue about the revised syllabus CIMA 2015 I felt the need to read and take away insights for my own professional development, and to share with interested readers.

Here, the curriculum is divided into a 3*3 matrix(Operational/Managerial/Strategic) and (Financial/Performance and Strategic. There are 9 objective based exams of 90min each which can be taken throughout the year, and 3 case studies of 3hrs each, available 4 times/year.  This means people can take the objective exams on demand, and need study leave/special scheduling only for the case based exams! This makes it easier for students.

Interestingly, CIMA has prepared a different landing page for each stakeholder-tutorials, students and employers, to explain the what/why/how of the change. It practises stakeholder management to the fullest! For example, the student landing page explains this

The updated syllabus remains as strong as ever on the core accounting skill, but we have added new material such as ‘Big Data’, sustainability, integrated reporting and finance function transformation. We have strengthened key themes such as risk, as well as costing and cost management, and adjusted the weightings of some syllabus topics.

What’s the benefit to you? Our updated syllabus and assessment mean that the real-life skills and competencies employers need are woven into the syllabus and thoroughly assessed. Passing your CIMA assessments at every level shows to an employer that you have a grasp of theory and practice.

Our new approach to assessment

We have updated the structure, type, technology and frequency of assessments for the professional qualification. For the first time at CIMA, all assessments will be computer based and in the case of the objective tests will be available ‘on demand’.

We will hold objective tests for each of nine subjects and an integrated case study at each level of the CIMA syllabus: operational, management and strategic. The first examinations under the new assessment method will take place in January 2015.

The syllabus does not seem much changed but is worth a read, for these nuggets which would atleast remind us of what we have studied/and or practised in the real world.
Financial Strategy(F3)
Considering agency issues during bid negotiation and transaction structuring(for example earnouts, stock based purchase); conflicts of interest during management buyouts(Dell example)
Hedge accounting is explicitly mentioned in risk management
Risk Management(P3)-concept of internal hedging as well as upside risk
Strategic Management(E3)-Game theory/Real options/Scenario Planning/Long range planning

If only ICAI/ICWAI/ICSI would adopt this transparent and flexible approach during their syllabus

RBI Governor critiques ICAI on CPE, seeking monopoly, forum representation

Its a habit of mine to read speeches by RBI Governor/Dy Governors to glean some insights into their way of thinking, and also generally to know what issues are generally concerning the economy. And while reading the RBI Governor's speech on Challenges to the Accounting Profession Some Reflections as an inaugural speech (http://www.rbi.org.in/scripts/BS_SpeechesView.aspx?Id=642), I was not disappointed. The Governor faintly praised the ICAIs efforts in helping the RBI perform its regulatory role, but remarked that

1. Continuing professional education cannot be a mere ‘tick in the box’ or determined by participation in number of hours of education or training, but should be evaluated by way of outcomes - upgradation of relevant knowledge and skill sets. 
2. Needless to say, the process of selection of persons for representing the Institute in international forums should be strictly meritocratic and transparent.  
3. So far, you have enjoyed a monopoly position in respect of certain areas of work, for example, the audit of financial statements. The easy way out to seek and expand opportunities would be to agitate for continuation of this monopoly position. I believe this will be a mistake. Rather, the profession needs to identify emerging opportunities in the market place and develop the skill needed to exploit them.  
4. It makes much more sense for the profession to sharpen its skills in the area of concurrent audit for which a need exists than to agitate for retention of work which does not add value. Similarly, the profession has shied away from the responsibility for prevention and early detection of fraud. The need for such a service exists and if the profession does not fulfill that need, other agencies which can provide this service will displace auditors and deprive them of a potentially expanding opportunity. This statement was given in the context of reducing branch audits for PSU banks, which ICAI has opposed. 

All these points are valid, and ones where the institute has been lacking. My views on them are

1. I have blogged earlier about how the CPE hours system is gamed, or backloaded towards year end to meet the mandatory commitments. While WIRC/ICAI have been trying their best to persuade members to spread the attendance evenly instead of only in December, I do not think the efforts are much good. And as long as the practising members view these CPE sessions as a place for good food and networking, things will not change.
2.  Regarding the process of selecting people for forums like IASB/IFAC etc, ICAIs representatives have been invariably Past Presidents/leaders of the profession. But is there anything wrong in advertising the vacancy transparently, so that those interested can apply? Such a process would be more transparent  than the back door lobbying which may be otherwise suspected.
3.  About seeking more opportunities for its growing members, well that is what ANY professional association is bound to do in the interest of its members, whether or not it be in the public interest. Why else do ICAI office bearers meet the new entrants of MCA(secretary/minister) soon after change? Why else has ICAI pushed for accrual accounting and public accounting reforms? I would say ICAI lost the first wave of opportunities in investment banking/corporate finance to MBAs, and now is in fear of losing it to programs like CRISIL CCAP/ICICI-NIIT MBA-which substitute full time professional education for on the job training.
4. To be fair, ICAI has been introducing certificate courses and training at a rapid pace, and also educating members about different career opportunities. But if such an eminent personality like the RBI Governor has such an impression about ICAI, then maybe we should speed up the process of change, and demonstrate tangible value addition in the services where we do not have monopoly. 

I would welcome comments from esteemed members on this topic, in a constructive light. It is better to hear the warning signals now, than wake up when the danger is at the door when it would be too late.

How the Indian Government/Regulators are creatively using checklists

Auditors have known the importance of checklists for long. Indeed, the audit programs are nothing but formalized and modified time tested checklists. But while auditors are trained to avoid the checklist 'tickbox mentality' and to 'think beyond the checklist', the same has not yet penetrated the compliance mindset. There are a plethora of laws/regulations/rules which need checklists. A few are listed below

• Corporate governance compliance checklist to be filed by listed companies with the stock exchange under Clause 49 of the listing agreement
• CARO 2003 checklist to be attached to the audit report, under the Companies Act 1956
• Due diligence checklist to be filled by the merchant banker and mentioned in prospectus
• Compliance calendar and checklists used for routine compliance purpose
• Due diligence checklists used during M&A, to ensure that no liability is missed out
• Pre-filing validation for e-forms/tax returns/TDS returns to ensure that the mandatory requirements are satisfied, and that wrong data/inappropriate numbers are not filed. This is indirectly using the same checklist manifesto. .

 However, all these checklists are dstatutorily mandated. There is tremondous scope for using checklists even for non routine work, to ensure that nothing is missed out. While this may implictly be done during audit planning, it would not hurt to have an output checklist to service as a work guide AND a milestone reference. As Atul Gawande's seminal book 'The Checklist Manifesto' apttly puts it, even highly skilled professionals may commit mistakes unknowingly out of habit, unless they internalize a checklist and bother to update it often. In case of CAs, professional judgement instances such as client acceptance, audit qualification, degree of audit evidence/sampling etc are all cases where a checklist would be very useful to ensure internal consistency. Other innovative ways to use checklists are

• Tickoff legal agreement clauses against desirable elements, to check for contract completeness and unusual terms. For example, an outlicensing agreement without audit rights, IPR reversion at end of term etc, is unusual to say the least, and may signal legal risk later on. This is done when approving VGF requests. This practice should be more widely followed.
• Using cross checks in tax returns check/PDS eligibility determination etc.

How the CA profession changed circa 2011-a lookback in 2020

We cannot (yet) travel in time, so only time can test my predictions of how the CA profession will evolve. However, so many exciting changes are happening(we live in interesting times) that I just had to pen down my thoughts to connect the dots, and do some crystal ball gazing

The global subprime crisis gave a boost to principles based accounting and auditing standards(IFRS, audit standards) which were nearly universally adopted/adapted from 2008-2013. But if investors thought it would result in lesser fraud incidence, they were sadly mistaken. The IFRS transition and IFRS induced volatility, led to a comedy of errors, misunderstandings and reratings of stocks/sectors. Management subject to tighter performance linked pay, clawback etc(copied from the Western banking sector pay clampdowns) responded by gaming the metrics. And IFRS was an unwitting accomplice. Realizing that they could use aggressive accounting without earning qualified audit reports, management went all out to polish their books. And the auditors still coming to terms with IFRS, auditing standards, new formats laws etc were always one step behind.  But investors were not dummies. The savvier ones among them(FIIs, PE funds etc) demanded forensic audit to be mandatorily performed in addition.  Companies on their part, realized that investor relations was too important to be entrusted to the CFO/CS, and instead decided to develop their in house teams with business understanding/insight AND with expertise in accounting, marketing and communications.  CAs again were picked up for this role, given their integrated understanding.

The global outcry against income disparities, basic necessity deprivation, corporate ‘huge earnings’, Govt spending , corruption and crony capitalism manifested itself in the Arab spring riots(Egypt, Libya, Tunisia..), Lokpal bill struggle in India, Dodd Frank/Obamacare in USA. The Indian Govt did not set up a Lokpal but agreed to be enhance the e-governance substantially, and introduce worldclass measures like self assessment, uniform tax rates, less complexity, tight but fair penalties, deemed resolution in favour of citizen in case of delay etc. This transparency increased the willingness to pay tax, and increased the taxpayer base to 25% of the population. Of course, this was aided by more withholding taxes(TDS/TCS), transaction taxes(STT, GST) and innovative tax base(MAT, dividend tax, reverse charge etc). After plenty of struggles, GST was introduced in 2015, with dual rates

CAs saw the need to collaborate within the profession(alliances, CPE circles, benevolent fund, networking) and with other professions(LLPs).  The MCA introduction of LLP was leveraged by ICAI to permit these partnerships. And how they prospered! Engineers, architects and lawyers helped immensely in valuation, due diligence and expert opinions in audits; while company secretaries and management accountants lent their name to compliance services, cost audits and transactional services performed by LLPs. Of course, the jack of all trades(CA) remained the managing partner. Stung by the fact that LLPs of mostly other professionals were grabbing the premier cost audits, ICWAI tried to amend its bill to prevent that, but failed due to opposition from other professionals.  Networks of LLPs rose(many of them borne from ICAI networking efforts) and challenged the Big4 in specialist areas like forensic accounting, valuation, merchant banking etc.

The ICAI efforts to increase the quality of entrants in the CA profession worked well. Despite a midway oversupply(May-11 CA Final placements!), the overall consensus in 2020 was that academic toppers entering the field, had done excellently and could challenge their science peers. This reflected in the MBA entrance results where more CAs got into the premier IIMs(instead of having to wait and go abroad/to ISB), as their analytical caliber helped them to crack CAT. Of course, the CA Final exam pattern was made more practical/applied to ensure that bookworms/crammers would not get rewarded for just knowing the contents of a Rs 500 CD ROM! Recognizing that the quality and quantity of CAs was going up, industry recognized this by shifting a good chunk of Tier I and Tier II MBA college placements to the ICAI campus placements.

This would not have been possible without an improved training. Discarding the old system of relying wholly on the employer for training inputs during the 3yr period, ICAI adapted the ICAEW system of learning diaries, to be maintained and uploaded online. Like how peer review/FRRB brought out the best/worst practices for assurance practices, the review of these diaries was a valuable source of course correction for ICAI, to help those students where learning seemed too skewed. And by setting up its own coaching infrastructure(attending those to be counted as articleship!) and centres of excellence, ICAI was able to conduct many more student seminars/conferences/training programs. The communication skills training program was made on par with top MBA programs, and the Information systems course also was so interesting that CAs decided to compete with BTech system auditors!

CAs finally entered the digital age with XBRL, which made data crunching less labour intensive. While some KPOs were not happy(!), software companies embraced the movement to offer 100% automated XBRL solutions, which could then be verified by the CA.  Even the source data(ERP system) become standardized with cloudcomputing based ERP solutions, that allowed even SMEs to enjoy the benefits of ERP without the capex costs and learning costs(project failure etc). These twin developments made it more imperative for CAs to be tech savvy, capable of writing that XBRL coder on the fly if necessary, or to liason between operational staff and software persons.

The general improvement in personnel, systems, tax compliance mood etc made the Govt/Regulators even more trusting, and sparked off a virtuous cycle. Human interface kept reducing(or replaced by helpdesks instead of that pesky inspector!), with the limited manpower focused on major cases/test cases only instead of picking on the small fry. Of course, the severe penalties for fraud/major mistake ensured that the tax payers/regulated parties themselves preferred the least human errors, for which systems were designed to auto generate the returns from the ERP/other MIS. This led to reduction in Finance Dept size(now one did not need so many people to manually prepare the basic stuff!).  Compliance hassles became fewer(thanks to model laws like LLP/new companies Act) as Govt focused on ensuring companies had processes in place, instead of just an accurate output. The CARO question on internal audit sufficiency and appropriateness, expanded to cover a chunk of other key processes like tax.

With all that technology push, finance departments decided to proactively respond to the double dip recession/cost push inflation/high interest rates etc. Management accounting became in vogue again, and companies began to actually read and apply their cost audit reports.  ICWAs finally got their due respect and status on par with CMAs abroad, as companies realized that they had ignored their low hanging fruits for decades. The worst hit sectors(banking, insurance, infrastructure) learnt to apply those lessons, and were now on the rescue path. 

So finally, the profession(service and practice) saw substantial changes. Those who went with the wind prospered, others were left wondering what happened.  

How ICAI is fast cutting the learning curve for new members

Veteran practioners have often recounted their war tales to me-of how they came to Mumbai from mofussil places to set up their own practice. Those days, unless you had a family history in the profession, setting up from scratch was quite difficult. I’m not donning rose tinted glasses and saying that entry in the profession is much simpler today. In fact, even old non Big4 firms are facing challenges to retain their growing clients and staff aspirations. Still, the ICAI is now doing a yeoman’s task to roll out a red carpet for its new members in practice, and to reverse the trend of new CAs preferring practice to service. Some examples are

·         Publications:- ICAI has published and allows free downloading of many industry guides, audit manuals, checklists etc(http://www.icai.org/post.html?post_id=6623). That facility allows net savvy CAs to download the manuals, read at their leisure and purchase only the manuals they wish. In fact, they can get entire documentation from scratch.

·         Loans:- Though open for all, it benefits newbies the most. The scheme(http://www.icai.org/post.html?post_id=6623) does not insist on collateral and is quite liberal compared to the other options out there.

·         Free  Software:- This independence day(16 Aug 2011), ICAI launched free office management software to help the firms prepare returns, ROC work, bank projections, manage correspondence etc. While there are other commercial solutions out there, having a free official version helps a lot

·         Subsidized software otherwise out of reach:- Areas like transfer pricing are not rocket science but they do require access to expensive databases. Same holds for litigation support practices(need Excus/TIOL etc). ICAI has arranged subsidized access to Tally ERP 9, transfer pricing software and other initiatives.

·         CPE Programs/Training:- While many CAs send their articled assistants to sign proxy in lieu of benefiting from it, some of these programs by industry stalwarts are really great and informative. If people go with some background knowledge, they can really learn a lot and also network with other attendees. For specialized areas like IFRS, Intl Tax, IT Audit; there are courses for  Rs 15000-30000 which do seem worth it, given the faculty profile and certification aspects of it.

·         Encourage networks:- For years, the ICAI would turn a jaundiced eye to networks of CA firms, but now it is actively encouraging its members to collaborate more and more, to be able to compete with the Big4. While few have succeeded, ICAI has spared no efforts in this regard to pave hurdles in its way.

Other reasons not quite attributable to ICAI are

·         LLP practices permitted:- These will allow CAs/CSs/CWAs/LLBs/consulting engineers to collaborate as individuals within a LLP framework, and specialize in their niche to give competition to bigger firms. While the older firms hesitate to induct other professionals, beginners can steal the march in this front, especially in new areas like cost audit(of which scope is now huge).

·         Increasing online governance/business:-Everything from corporate e-filing , tax payments, returns etc can now be done from the humble desktop. The need to suck up to the lowly departmental officers is now lesser(no chai pani for routine online work!) and now competition can be more on intellectual brainpower/experience than on decades old networks and contacts within the bureaucracy.  Softwares + cheap storage solutions allow for nearly 100% digitization, and lesser need to have huge bulky files eating up office/godown space. Hence, if not for the image, small offices are perfectly ok. 

I’m the first one to admit that ICAI is not perfect(far to the contrary) but we should admire and support its good initiatives.  So will all the above benefits induce me to enter practice? Probably not, but then that would not be for want of opportunity/support infrastructure.

Lending agreements-increasing trend of outsourcing monitoring to professionals

Conventional financial theory holds that financial intermediaries(like banks) add value('spread'/NIM) by aggregating deposits and lending them to qualified borrowers. For these loans to be profitable, banks should have the expertise in credit risk assessment and monitoring. But the past few years(decades?) trend seems to be negating this theory. While banks are focusing their energies on gathering deposits(more channels, multiple access mechanisms, marketing) and processing loan applications faster('retail loan factories'), their response to scams seems to outsource that monitoring function to a professional. For example

1. Some banks give 0.25%-0.5% interest rate discount to their SME borrowers with credit ratings. 
2. Stock audits/financial audits(where not otherwise done) are made mandatory for those with working capital/other operating facilities.Incidentally, this is the mainstay of many a SME practice.
3. For borrowers with multiple bank relationships('consortium lending etc), RBI has mandated a compliance certificate to be issued certifying governance issues, no fund diversion etc. Interestingly, this circular also contains a best practice of different statutory/internal auditors for group companies, where facilities cross Rs 50crores.
4. Often, the audit clause contains a 'Big 4' auditor appointment insistence-this is true of the Indian private sector banks, but this trend seems going down though. 
5. In additional to the general purpose financial statements, auditors are often asked to sign a compliance certificate(under the lending agreement) which contains proforma ratio calculations, covenant compliance affirmation etc. When the auditor is tasked to do this(albeit for extra fees), he is in reality doing the monitoring function of the bank.
6. Auditor/CAs are often asked to certify the utilization of the earlier sanctioned funds, before the next disbursal is approved. 

 Conceptually, there is little quarrel with the proposition of 'bundling of services' or delegating to experts. When the auditors/credit rating agency are expected to know the client well and perform their tasks with due diligence, then the bank is entitled to rely on them. The only possible issues with this, is that the processing fee/interest rates should reflect this reduced risk, as well as reduced costs for bank. Otherwise, the benefit from these activities directly flow to the bank's bottomline. Btw, the professional referred to in this are practising CAs/CSs/CWAs-most of whom can do the above work. Still, the statutory auditor is preferred for most of this.

Standards as public goods-the case for free downloads.

In the good old days, only doctors, lawyers and accountants were considered professionals. Now, every service businessperson clamors to be recognized as a professionals. Right from actuaries, investment professionals, valuers, risk managers etc, associations of professionals establish institutes like CFA, FRM etc, and then attempt to get monopoly status for their members. Now, nothing per se is wrong with this attempt, though one can argue on how successful these 'professional associations' are in terms of value added to their members and society. After all, skilled work does benefit from licensing and discipline.

Now, professional standards not only propogate 'best practice' in the area, they also educate the users of what to expect from their licensed professional. So, charging a fee for those standards reduces the dissemination not only to members(unless purchasing them is tied in with the annual membership fee), but also to students and the laypersons(public/journalist). And this reduced circulation would impact analysis, dissemination and critiques by those not able to pay for them, especially in emerging economies.

Now, one may argue that nothing which comes free is ever valued. That is why one can follow the path of the international accounting standard setter(IASB, responsible for IFRS). It is a non profit organization dependent on its members for funding, but which aims to self sufficiency. Therefore, the standards themselves are free, but the value added guidance notes/interpretations are not free. The rationale being that only experts/professionals would require those, and can very well pay for them. There is special pricing for students and academics, while journalists have free access.

Or one can follow the path of the Indian accounting regulator(ICAI) with more than 10lakh students+members. It uploads all its publications in PDF format on its portal, thus allowing knowledge to spread freely. In a country like ours where knowledge is valued(but purchasing power is low), such a approach will work wonders in the years to come.