IS STIPEND OF CA TRAINEE ENOUGH?

[rrraheel]

ASSLAM O ALIEKUM

I have a simple questions for all the trainees for firms registered under ICAP.

Do you think current stipend rate are enough for a student of C.A inter student ?

Before answering consider how much work we do in a firm, increase of minimum wages by government to 7000, also the stipend rates changed before two years and what can be effect of inflation on these rates ?

If we think these rate should increase so what we doing for it ?

At least we all should write an application to ICAP and let it come to their consideration.

comments required from all trainees..

[aimaad22]

It should be at least the minimum prescribed by ICAP which at the moment is 6500.

Your question is incomplete actually. Enough? Enough for what? Enough to support a family, buy a car, to do what? Of course its not enough for all that. But remember that this is a part of your qualification, even though we work full time. This is an investment that will pay back for the rest of our lives. Dont measure it by the stipend, the value we receive in these years is much more than any stipend. The purpose here is not to earn cash. You should be clear on that.

Already many firms have cut down the number of people they hire and some are not hiring at all, even the big 4 have to be careful because of the massive increase in costs, remember the cost of trainees in not just stipend but also traveling etc. If the stipend was further increased the situation with people looking for articleship will become even worse as firms will hire even less people, already the situation is quite bad. Qualifying and getting experience is more valuable than any stipend you can get. Think long term, a few thousand increase in stipend will destroy the future of many students, its not worth it, at least until the economic situation improves.

[rrraheel]

Hi. Aimaad

Can you explain the effect of this economic crisis to Audit Firms giving Assurance Services. And how much they are effected by such economic crisis in figures(if you have). How much their business have effected ???

[rrraheel]

My enough is Simply to support me and my study without taking assistance from family. Study cost includes paying fee lectures, books, exams and annual fee. It never be as you mentioned cars or supporting family with it.

[aimaad22]

No I dont have any figures, you know we arent just handed the internal accounts of firms just like that.

Use your common sense. Can you not see how much the general business environment has deteriorated over the last few years? The industry is on its knees and commercial activity has gone down drastically. These people are audit firm clients. I shouldnt have to explain the effects of inflation which affects us both directly and indirectly.

Yes it would be nice to have a larger stipend but at the moment its doesnt really look feasible.

[rrraheel]

Dear at least every audit trainee see and many like me make disclosure of Auditor's remuneration in any company for which the audit. My common sense ask how much we saw that audit fee of any client has decrease or even constant from last year's accounts of any client. so my common sense say no client decrease its fee at all rather many have increased Audit fee. So all to blame environment is not good at all.

Also i have other points to show its not fair to give this much less stipend. But i want not to prolong this discussion as it will not be of any benefit.

Take Care. [)]

[Nauman]

Audit fee forms a small part of what audit firms earn (specially the big 4), I am not sure about the exact break up of earnings but large amount of earning comes from Management Consultancy and Tax consultancy services these firms provide. Obviously companies will cut down on new assignments when their own revenues are going down.

[kamranACA]

Dears

Stipends have always remained a question and people on both poles have always given different point of views. To be honest, I had always been on the corner where Aimaad has found a place.

The earnings of firms are not a question to be discussed by kids; and the word kids is not to disgrace or defame any one. Students are certainly kids being on the very first step of a stair to their professional career; although we know there are some people about which prayer of IQBAL suits a lot, i.e. Khirad ko Ghulami say Azaad Kar....Jawano ko Peeron ka Ustaad karr....; so we have some very intelligent and quality people who just need polishing and have God gifted enormous potential.

To my understanding mostly the assurance department of the firms works on break even or loss or on very low profit margin. This is a fact; and figures disclosed in so called accounts of clients are too much evident of this fact if we reasonablly have the ability to forecast the things. The firms in fact earn from advisory and consultancy; and it is also a fact that advisory and consultancy gives fabulous revenues. Our students/trainees usually have a very low contribution in these functions of the firms in qualitative means. Any one who is working in a good firm can figure it out.

It's good to increase stipends; yet it is good to promote an environment where revenues of the firms may also increase. Again to be honest, there is no magic stick to do so. We are seeing how badly ATR-14 has been criticised and judged by CCP, for which case is still pending in SC. Unfortunately in Pak we have the worst paymasters. Entraprenuer dont even want to pay a penny for thankless jobs which most of the accountants do in their assurance departments.

Recognising these facts I had been and am of the view that any unwise and unwarranted step taken will not only tighten the working capacity of the firms, but will also put far more pressure on the trainees working with them and the prospective trainees who wish to step in the professional career.

As far as ENOUGH is concerned, there is nothing ENOUGH in this world. Let's see what happens ahead, if we succeed getting to the place promised for faithfuls. I hope there we may find the meaning of ENOUGH.

Regards,

[aimaad22]

I dont know why everyone makes stipend such a big issue. I mean for instance, I did my ACCA in 2.5 years. Now for 3 years I'll be inshAllah getting experience along with studying and making a little bit of money too. If I was getting any other education, for e.g doing an MBA, I would still have 3 more years at least to go and also paying the very high university fees along with that. And at the end of that I would still have no experience.(Im aware MBA require experience now but its just an example as most masters degrees still take 6 years from fsc/A levels). So in a sense we are more lucky than many other people. And I think after we pass module E the stipend increases.

[kamranACA]

I don't wish to convince any one on the subject yet I remember the saying of a fellow about quality firms that even if they charge us (trainees) for the training and upbringing and growth opportunities, it's not a costly venture.

Firms make the trainees the quality professionals and quality firms add much more value. Can any one achieve this without undergoing such process?; if yes, then why to bother for the work and stipend at all? Why not to achieve it at our own? Just lay off the firms then!

Regards,

[fpaimran]

In my opinion, Firm is an institution which brush up the students by consecrating the them and providing an oppertunity to work in different sectors and environments. Student should not have any concern about what is and what will be the revenue of the firm. Students are registered with the firms in order to get experience at the cost of the firms not to earn money. So, i think stipend rate of Rupees 6,500 is enough if someone is registered in a firm situated in his /her hometown. In case of other students who are outsiders, there may be difficulties for them to servive in this amount.

[Nav33d]

dear student,

as u have told that it is a part of training but you should also note that the firms are earning huge incomes from this training of CA trainees but they do not paying thier right pays, i.e, stipend and overtime/T.A/D.A....
e.g one audit fee, excluding out of pocket expenses, of small NGO is about Rs. 75,000 ehich is completed by maximum 3 students in two weeks time so the firm is actually paying Rs. 19,500 (6,500x3). So the net earning from this single assignment is Rs. 54,500....

so you think about ur answer again...... thanx

[kamranACA]

Naveed

Firms do audit NGOs may be in 75K but the thing to remember is that firms are not NGOs in theirselves. You just forgot the cost of supervisors, Assistant Managers, Managers, Directors (leaving apart the partners who are equity holders), phone and computer operators, and people hired for support services like drivers and peons and watchmen/security guards; rentals, power, petrol, utilities, office expenses, depreciation, subscriptions and periodicals, stationary and printing, entertainment, maintenance, vehicles running, insurance, and last but not least a lot of unabsorbed travelling. Students are not the only one factor causing cost to firms, rather they are just one factor. A bunch else is there as well.

After providing for all these expenses the equityholders (partners) need to be reasonably compensated for their experience, time, devotion and responsibility and the burden of firm's tax which only equityholders have to share.

I told in my previous posts that MOSTLY the audit departments of firms are on break even or loss; and if some one is in profit, the margins are very low.

I understand in the age of a trainee it is hard to grasp.

Regards,

[aimaad22]

I agree with the above post. In my own firm's office I have seen there are so many things going on and there must be an incredible amount of expenses!! We may be getting only 6.5k but the firm is actually spending a lot more on us than that amount which is what we need to understand!!

My point remains answered. Compare yourself to other fields students. In less than 3 years since doing A levels Im getting experience and earning some money(no matter how little). Another guy studying in a good Uni will spend at least another 3 years paying extremely high fees and earning nothing until he does his masters. And even after that it is highly likely the CA will be earning a lot more than his counterpart at the end of the 6 years(i.e if he qualifies). Why dont you people understand this? Whats there to complain about?? Just pray to Allah that we're able to complete our exams in these 3 years. If that happens, then you'll see the real value of this time.

[Schuaeb]

<blockquote id="quote"><font size="1" face="Verdana, Arial, Helvetica, san" id="quote">quote<hr height="1" noshade id="quote"><i>Originally posted by kamranACA</i>
<br />if they charge us (trainees) for the training and upbringing and growth opportunities, it's not a costly venture.

<hr height="1" noshade id="quote"></font id="quote"></blockquote id="quote">

Opinions do not change!