Chartered Accountants Day was celebrated a few days ago. The Institute of Chartered Accountants of India (ICAI) and its members were warmly greeted by millions including the Prime Minister. He rightly stressed on the deepening of the partnership with ICAI in nation building. He also emphasised the need for Indian firms to grow in size and capabilities with a view to attain international stature. While there is a strong basis to draw inspiration from this renewal of trust, it also alerts the ICAI and its members to raise the bar in every respect.
This is because the stakeholders’ expectations have risen, recognising the ICAI’s role in creating an economically resolute India.
To put things in perspective, we may remember what our first Prime Minister had said: “Time is not measured by the passing of years but by what one does, what one feels, and what one achieves.”
In this context, it is also quite relevant to recall ICAI’s founder President Gopaldas Padamsey Kapadia, who had said: “… it will take time to build up its (Institute’s) traditions and I am sure that in course of time the Institute will have the best of traditions of which the profession and the country will be proud. The assistance of the members of the profession as also the Government and public is necessary in building up the Institute and I am sure that this be had in the fullest measure.” His words were both wise and prophetic. Our membership has been contributing to the economy of the nation and in all possible ways strengthening the foundations of ICAI. At the same time let us be cognizant that our glorious past puts more onerous responsibilities on CAs to continue to be custodians of public interest and welfare, and to discharge all responsibilities in the best interests of the nation. The last two decades have been full of challenges to the accounting profession with regard to its credibility in view of numerous scams in India and abroad including in developed nations like USA, UK, Singapore and Hongkong. The Indian accounting profession has evolved and has undergone a positive paradigm shift. Having upheld a tradition of converting challenges into opportunities, the story of ICAI has been one of pursuit of professional excellence. Over the decades, we have lived up to the outlook of the founding fathers of our Constitution when they granted autonomy to the profession through the Chartered Accountants Act, 1949. The fact that this Act predates the adoption of the Constitution of India shows the importance that was given to the profession, to act as custodians of transparency and integrity.
Our history shows that we have resolutely upheld society’s trust barring certain mishaps on the way. As such, today’s CA is no longer just a statistician but a versatile strategist and value-creator for modern business. In the last 72 years, the role of the CA has shifted from the backroom to the boardroom. This dynamic journey is marked by several milestones. A few areas deserve to be highlighted. These include the remarkable growth of membership; continuing emphasis on quality education through creative learning; various initiatives in relevant streams; implementation of Accrual Accounting Systems in some local authorities and government departments; institution of awards of excellence in wide-ranging areas; implementation of IndAs (IFRS equivalents); assistance in budgetary activity; seamless thrust on the Accounting and Disclosure revolution; assistance during disasters and crises to meet social commitments and wide representation in global platforms.
With liberalisation, privatisation and globalisation (LPG), chartered accountancy became an extremely gratifying career in India. Considering the various benefits of becoming a chartered accountant (CA), many pursue this career path. In fact, in any given year, there are over 100,000 students who appear for examinations of the Institute of Chartered Accountants of India.
There have been phenomenal changes impacting the profession. These have included (i ) the shift of tax work from advocates to CAs in small towns after Tax Audits were introduced in 1985; (ii) Shift of sales tax/Vat/Service Tax work to Cas; (iii) Tremendous growth of the profession after implementation of the GST Act four years ago: (iv) Gender Ratio Change, where presently the profession has almost 26 per cent women members and more than 40 per cent girl students; (v) Constant change in curriculum in response to changed dynamics, and (f) Embracing new-age technologies and incorporating these in the course curriculum and training, although these may require improvements. It is in this context that we believe a few select focus areas deserve accelerated traction considering recent developments including Covid related challenges. These are:
* Training should be aligned to the new challenges and made more effective by better monitoring e.g through the E Diary concept;
* Case-study based evaluations in line with global best practices to test the integrated understanding of the students with respect to various subjects;
* Help to build future-ready CAs both for employment and practice including overseas opportunities by entering into more MRAs with various international bodies;
* Reshape the size of firms keeping in view the aspirations of members;
* Enforce higher IT penetration in the ways of working including training on new age products like AI, Block Chain, Cloud Computing, BI, Data mining and acceptance of a Remote Working culture;
* Mitigate the accountancy redundancy risk;
* Promotion of resource-sharing culture;
* Attain specialized expertise and remain abreast with legal and procedural (technical) updates on non-audit services, FEMA, RERA, GST, etc.;
* Adjudication and appeal-related assignments including IBC related proceedings;
* Mergers and Acquisition assignments including Due Diligence and Feasibility Study Reports;
* Valuations and arm’s length studies;
* Impact Study Assessments;
* Insurance Surveys;
* Partnering in NPA Management;
* ASM and Forensic Audit etc,;
* Assuming role of CFO as a strategic partner to the business, particularly for MSMEs
Besides, there have been certain profound changes both in perception and on ground. There is a likelihood of decline in empanelment and regulation-based work e.g. bank audit, tax audit and even company audit below the mandated threshold. This would clearly depend on the potential value propositions that a CA brings to the table. Second, the journey from GM Finance to CFO and CEO has had its own impact on the profession. Also, the enhanced role of regulators including NFRA has redefined the professional dimension in many ways. Lastly, ever-growing weightage on values, ethics and compliance will keep members on their toes.
An area of concern is that professional opportunities in smaller towns are shrinking. ICAI will have to identify new areas of professional work for members in such places. Reluctance of members to move away from native places has also not helped in resolving the problem. To avail opportunities, members will need to be mobile and move to places where opportunities beckon.
Despite various challenges we are optimistic about the profession. However, to reap benefits of various opportunities it will be imperative for members to learn, unlearn and relearn and also upgrade themselves with advanced technology. With regulators becoming tougher in their stance, ethical conduct will be as important as competence.
At times questions have been raised as to whether technology will make CAs irrelevant. The answer is no. Technology will certainly eliminate pure accounting jobs by more than 90 per cent. Robots may undertake functions of placing orders, accounting, authorisation for payments etc. but technology-based auditing particularly to evaluate internal controls and in specialised fields like forensic audit will become more relevant. Data mining and analysis will be the order of day. We are certain that computers in the form of the human brain will never be irrelevant. Cross border flow of capital, services and human resources will necessitate understanding nuances of international taxation. This has already thrown open an opportunity to CAs and that is likely to grow. But CAs will have to study and understand the implications of Double Taxation Avoidance Treaties to advise their clients more professionally.
As stated, there are many opportunities, but the need is for CAs to be able to exploit these. We must ensure generation of credible and transparent financial statements that serve the interests of all stakeholders, rather than of the promotors alone. We have come a long way from being mere tax practitioners and accountants to Business Solution Providers. In employment too, we have assumed the positions of CFOs and are now moving on to assume responsibilities as CEOs. This is great news for the profession.
No profession can grow if expertise is claimed by a few. Monopolies are bad in any field, be it business or a profession. So the profession has to gear up to the challenge of creating large-sized Indian firms. Networking of firms specialising in different fields or operating in different geographies may not be a bad idea. It will allow members to avail benefits of sharing physical and technical infrastructure and reduce cost of operations. More importantly it will facilitate pooling of investment in technology so vital for growth. At the same time, regulators like SEBI, RBI, C&AG and other government departments must be convinced to take cognisance of such networks while allotting professional assignments. The future of the profession appears to be bright. But are we prepared to take opportunities in our stride? Only time will tell. But there should be no doubt that the profession shall continue to play an active role in developing the nation and shall facilitate achievement of the goal of Atmanirbhar Bharat through qualitative and ethical services.