Swadharma for Chartered Accountants

Swadharma for Chartered Accountants
S. Gurumurthy


Is Dharma is religion-neutral? Yes

The title 'Swadharma for Chartered Accoutants' which connects Chartered Accountancy profession, which is commonly known to be in the secular domain, with Dharma, which is popularly believed to be in the religous domain, is an intellectually challenging yet stimulating subject for discourse. But, before discussing and debating what is Swadharma for Chartered Accountants, we need to understand what is Dharma first and then Swadharma. The discussion on Dharma goes to the root of the Indian civilisation. Before relating Dharma to the accounting profession, first we need to discuss whether Dharma or Swadharma is a religious concept or religion neutral and if religious, how would it apply to a secular profession like the Chartered Accountancy. 


In this debate we need be conscious that due to the gap in understanding of the Western scholarship about Hinduism, the concept of Dharma was mostly wrongly associated with religion and spirituality and even in the Hindi version of the Indian Constitution, when conceptually and in practice Dharma transcends both and is as earthy and earthly as life itself is. Dharma is not religion or equal to religion. Dharma is not a religious term. In fact, the term Dharma figures in, and is common to, all Indian religions – Hinduism, Buddhism, Jainism and Sikhism. Being common for all religions, it is religion-neutral, not sectarian. Even when it is suffixed to religions like say Hindu dharma, Buddha Dharma, it means not Hindu or Buddhist religion, but Hindu or Buddhist interpretation of the general concept of Dharma. Happily, in recent times, Dharma has acquired a religion-neutral, meaning in secular, public discourse – like 'Rajdharma', 'Coalition Dharma'. Even non believing, secular politicians have started using these terms, which indicates the gradual secularisation of the concept of dharma.

Is Accounting profession not sacred? Yes, it is.

But the next question is whether Dharma is secular or sacred. Unless we further understand that Dharma is as much secular as it is sacred we cannot relate it to a secular group like Chartered Accountants and a secular profession of accountancy. Actually, in ancient Indian world view and philosophical perspective there is nothing secular as everything is sacred. In contrast, in the Western view, the world and all things worldly – earth, water, plant, or animal or river or mountain – are secular, and there is nothing sacred about them. But in the ancient Indian philosophic view all such worldly things including matter like stone and metal included – are sacred. Extending it further, all material things – money, house, profession, business or employment, instruments and machines we use and the rest – are also sacred in the ancient Indian view, but, secular in the Western view. Despite becoming free as a nation and society, since our current world view being still influenced by the West, we regard money, house, profession, business, employment, instruments and machines we use as secular.

But stop, close your eyes, and contemplate for a moment. In practice we revere them as sacred, like we regard books and office instruments as sacred and even worshipn them; we revere the home as sacred and even the keep foot-wears outside. This reverence for that what is secular in the Western sense as sacred in the cultural and civilisational sense in India is common for the followers of all faiths. Once this civilisational confluence is recognised, the concept of Dharma, which regulates our attitude to worldly things and affairs including our profession, not only becomes religion-neutral, but also sacred. Once it is accepted that one's profession is not just secular in the sense of its worldliness but sacred as well in the sense that there is a higher value attached to it, the accounting profession too is sacred, and so are all tools associated with it. This marks the first difference between the Western view of the accounting profession and ancient Indian view. This leads us to a discussion on what is Dharma as it is necessary before understanding its connection to the accounting profession and Chartered Accountants.

Dharma: Values which hold or sustain institutions, society

India is unique in its intellectual, scientific, moral, ethical and philosophic contribution to the world in many respects. But the most distinctive contribution of India to the world is the concept of Dharma. The meaning of Dharma is ascertainable from its root 'Dhr' in Samskrit language which means to hold or sustain. The meaning of Dharma is "that which holds or sustains". In the ancient Indian view, in the macro sense, the compendium of values which sustain the society or any institution – be it a family, profession, business, or an association of professionals or businessmen – is dharma. The word Dharma has no equivalent in any other language. Without understanding what is Dharma an Indian is incomplete in comprehending life in its intellectual, moral and ethical sense. Dharma includes but transcends duty. It includes but transcends right. So dharma mandates individual duty and ensures collective right. It is virtuous conduct at the personal level which collectivised becomes collective right and moral order at the collective level which ensures individual right. So Dharma comprehends the collective as well as the individual discipline – as collective discipline is nothing but collectivised individual discipline, where the micro amalgamates into the macro. Yet, no one enforces Dharma. It is a voluntary obligation undertaken by the Dharmi, the follower of Dharma.   

What is Swadharma?

Swadharma and Swakarma are two inseverable dimensions of a human being. Swakarma means one's own personal, moral, ethical, and social duties and Swadharma means obligation to perform that duty, which disciplines and regulates Swakarma. The collective of Swakarma [personal duty] is the activity of the society and the collective of Swadharma [the obligation to perform that duty [Swakarma] as a whole which sustains all sections by mutuality. One's contribution of duty [Karma] transforms as another's right – like the son's or daughter's duty as the parent's right and parent's duty as son's or daughter's right or like a client's duty as the Chartered accountant's right and the Chartered accountant's duty as the client's right – and the collective of Swadharma in performing one's Karma [duty] transforms into Dharma which sustains the society, nation and even the world and all institutions which intermediate between the individual, family, society, nation and the world. Dharma is the phenomenon that sustains the macro phenomenon – be it the larger society or the profession  of accountancy or for that matter the institution which regulates that profession itself  – Swadharma, in the case of a Chartered Accountant for example, is the micro version of the concept of Dharma. The collectivised Swadharma is Dharma of the institution.

Swakarma was originally regarded as right and obligation by birth. So was Swadharma. But no more. The declaration of Sri Krishna in Bhagwat Gita, "Chaturvarna Mayasrushtam Guna Karma Vibhakasakah" meant that Sri Krishna himself created the four socio-economic classes – the intellectual class, the ruling class, the business class and the working class – according to one's nature and choice of work. The contentious issue was whether the classification is by birth or by choice and training. Bal Gangadhar Tilak in his Gita Rahasya pointed out that Sri Krishna had used the words "guna" [nature] and "karma" [skill] and not "janma" [birth] and so the formation of the socio-economic class is by choice and training based on one's nature and work choice, not birth. Tilak's interpretation of Gita, which was contested in his times, is practically being followed in current times as any one can choose any profession that suits his nature and skill. So Swakarma is one's choice based on his nature and skill. And Swadharma is the obligation to perform that duty. While Swakarma is one's choice based on nature and skill, Swadharma, which is the personal, moral, ethical, and social obligation to perform that duty, is not choice. It is a self-imposed, but unenforced discipline.

Swadharma of a Chartered Accountant

Once, a person exercises his choice to become a Chartered Accountant as his Swakarma, then he is obliged to follow the Swadharma of a Chartered Accountant. What is the Swadharma of a Chartered Accountant? One needs to grasp the the relation between Karma and Dharma to understand what constitutes the Swadharma of a Chartered Accountant. The relation between Dharma and Karma is manifest in the ancient Indian concept of "Purushartha" which is the fundamental rule of human life and society. Purusharta is a four-fold principle – Dharma, Artha, Kama and Moksha – in which Artha [materialism] and Kama [enjoyment] which are manifestations of Karma are subject to the rule of Dharma. And if human beings earn material things and enjoy the fruits of them according to Dharma then there would be individual and collective fulfilment in the worldly sense and equally fulfilment and salvation in the religious sense also. This is the principle of Purusharta. Every human being who has desires [this will obviously and only exclude a recluse or saint who has no desire] has a duty [Swakarma] to earn material things [Artha, namely money, power, influence etc] to entitle them to enjoyment [Kama], but both earning [Artha] and enjoying [Kama] must be according to his dharma [Swadharma]. The Purushartha concept will function only in a relation-based society.

This is where the ancient Indian concepts of Dharma and Swadharma discipline all professions including the accounting profession and such self-disciplines are alien to Western world view. In the West an accoutant has to earn according to law and rules and there is no other moral, filial, social, or other discipline over his earning. And further once he has earned according to law, he can spend on what he likes and enjoy as he wishes as an individual. But here in India, a Chartered Accountant has not only to earn according to law, he has to earn according to his Swadharma and follow the rules of Dharma. Otherwise he cannot get the over all and internal fulfilment which is the very end and goal of Purusharta.

Swadharma based on relations, not on contracts

Swadharma and Dharma are higher rules than law, rules and contracts. They make contracts, laws and rules work and even superfluous at times as they work more effectively than do formal contracts, rules and laws. This is because Dharma and Swadharma are founded on relations. Dharma cannot be, and is not, the subject of contracts. Relations are the basis of Indian social order, business and professions included. But the West exclusively operates on contracts. In India relations support and supplement, not supplant contracts. So the transactions costs are less. So is generally in most Asian economies as contrasted with the Western, particularly Anglo-Saxon. So the West and we operate on two different paradigms, not just different at the margins.

See how the difference between the two works in the case of a CA firm. The Multinational Accounting Firms which operate purely for fee. And on hourly basis. And on contracts. There is no sense of relation other than business relation between two faceless entities – the corporates and the CA firm. But an Indian CA firm does not operate only on contracts. And cannot. Also cannot work only for fee. It works also for fee. Because it works on the basis of relations. An Indian CA firm will have to and will stand by a fallen client who is unable to pay. This is its Swadharma, ethical duty. It will charge an individual assessee who has no business differently from a businessman who is an assessee even though the time devoted is the same. This is because it is not consistent with the rules of dharma to charge both simiarly. It is true of a businessman making losses as distinct from a businessman making profits. The Indian CA firm shares the fortunes of the clients. An Indian CA firm will not charge a trust as much as it will charge a business. Many do not charge charities at all. In fact a large part of an Indian CA firm's time and resources is committed for work which fetch no or less than commensurate return. This is because of relation based practice which is part of their Dharma. It is its Swadharma for a CA firm to identify with the fortunes of the client. The client and the CA are bound by relations. Not by contracts. Contracts make no meaning. Where contracts dominate and relations decline, Dharma disppears.

There are also other, well-known aspects of distinctness operating on business and profession as for instance Mutual Funds ans securities for Jain community investors, a rich group, who would not invest in securities which involve violence, like businesses involving meat, liquor or tobacco etc. This is neither to be trivialized as un-modern or anti-modern, nor seen as higher value, or a superior virtue. But simply as a distinct value and respected as such. All such distinctness is founded on relations – filial, social and religious. This is a reality in Indian way of life. There is no way this can be ignored in legislation and regulation. It is because of diversity in life. The concept of recognising diversities is the very essence of Dharma, while homogenising everything is the very essence of the West. While Dharma seeks unity in diversity, the Western thinking and methods seek uniformity. Likewise there are CA firms which will not take up certain kinds of audits. They should be recognised for such distinctness. This is voluntary restraint or regulation. The formal regulations should recognise this distinctness. This is because of social and spiritual relations, not contracts.

So the critical part of the Swadharma of a CA is relation based approach to professional work. In fact the idea of the West is to ensure that there is no relation other than contractual and legal. But morally sound relation of a CA with a client which is not influenced by money is a great source of ethical influence over him to dissuade him from doing things unacceptable to law, prudence or morals.What contracts cannot ensure and law and rules cannot prevent ethically, sound relations can achieve. However, there is a caveat.

Contentment and humility – the foundation of Swadharma

The observance of Swadharma is founded on two socially insisted personal principles about which the Mahaswami of Kanchi, universally acknowledged as a sage, wrote in response to Pundit Nehru's preface to the book of Rashtrakavi Ramdhari Singh Dinkar in late 1950s. It is very relevant to recall his profound response. In his preface to Dinkar's book Pundit Nehru had lamented that we are unable to give up our traditions nor keep them up; and we are unable to reject modernity nor follow it and therefore we are confused and are unable to show lead to the youth. As a result, Pundit Nehru foresaw, a crisis of charcter emerging in India. To this the Mahaswami of Kanchi responded saying that such confusion in the mind of the most admired leader of India was not in the interest of the country and even though he might not be able to remove the confusion, he had a responsibility to give his views. The Mahaswami said that our dharma was founded on two virtues on which only it functions. He said that Aparigruha [contentment] and Nirahambhavana [humility] are the two virtues which act as crutches for Dharma to function. He added that modernity works against both. He said that unless we preserved contentment and humility as individual and social virtues we would increasingly face crisis of character. This exchange happened some 60 years before. But it is still valid today. If the Chartered Accountants have to uphold their Swadharma, first they need to be contented and next they need to be humble and moderate in their professional methods. A contented CA firm will have such high moral and professional standing that will be a heritable quality of the firm and its partners. This is what is missing in the modern business world. State regulations are poor substitute for self-regulation. But self regulation cannot be effective unless there is Swadharma in the CA profession and Swadharma insists on contentment and humility.

For the attention of the ICAI   

The Institute of Chartered Accountants of India is repeatedly endorsing the regulatory regimes of the West which first make all voluntary regulations and even the ICAI irrelevant. The ICAI is obsessed with the rules and regulations of the West which seems to be concerned in effect only with the sensex and listed companies of India  accounting for single digit of contribution to India's GDP. Only a minuscule number of the Indian CA firms are engaged in sevicing them. A large number of CA firms are servicing the non-corporate sector and government sector which account for over 2/3 of the GDP of India. But the ICAI seems to be exclusively working on the model of the West and is ignoring the vast non-corporate sector which needs to be serviced more effectively. It needs to devote greater attention to them. Even the corporate sector in India which accounts for 14% of India's GDP is functioning largely on relation-based approach as do most Asian economines and virtually none of the Anglo-Saxon economies. But still ICAI and the government of India liberally import the Anglo-Saxon rules and regulations which ignore relation-based business and professional model and institute contract based model as replacement. This works in the West because, the West has lost the relation-based family, business, social model long back and so it is substituting relations with contract. That is not the situation in India. And that is why there are myriads of approaches to busienss and profession in India. In fact the Anglo-Saxon model tends to invalidate the ICAI itself and replace it with a government regulatory mechanism, thus ignoring the relation based – read Dharma-based – model of chartered accountant-client relations in India. This is a subject for intense discussions. Will the CA profession take up this challenge particularly at a time when the western world is looking for alternative ideas from the East, particularly India which is seen as a rising geo-political power. A rising power should begin to think originally and contribute to the world. It cannot continue to carbon copy the West.