With the onset of online and real time accounting, the CA Institute, which is regulator for audit profession, sees audit reports being legally mandated to be presented at much shorter frequencies in coming days, its new President Ranjeet Kumar Agarwal has said.
Presentation of audit reports to managements on a quarterly, half-yearly or annual basis may not be of value to managements and chartered accountants need to equip themselves to cope with the advancements in technology to present reports with much shorter frequency, Agarwal said in his first media interaction post assuming office at the helm of Institute of Chartered Accountants of India (ICAI), the world’s largest accounting body.
“Because of advancement of technology, the role, process and methodology of audit is going to change. The management will not wait for one year. Skill sets in CAs has to increase so that whenever the frequency comes down, the audit report as per frequency mentioned in legislation they should be ready,” he said.
To enable chartered accountants to be ‘future ready’, Agarwal said that ICAI will during his Presidency open 11 centres of excellence across the country where customised requirement of skill building can be conducted there. “On the lines of various management institutes we are going to organise 3,5, 7 days for chartered accountants in these Centres of Excellence,” he said.
“We are of the opinion that in an era of online and real time accounting, the frequency of audit reporting is going to change. That is why it may not be an annual or half yearly, the frequency is going to come down drastically,” he said.
This planned skilling effort for chartered accountants is part of “DRISHTI” vision that Agarwal unveiled on Wednesday for ICAI during Council year 2024-25.
DRISHTI stands for Digitalisation, Research, Integrity, Skilling, Transparency and Independence.
Artificial intelligence
Asserting that artificial intelligence (AI) would only be a helpful tool for the CA fraternity, Agarwal said that he sees AI taking away the compliance work from CAs and give them more time to advise corporates. He said that a committee has been set up under his Presidency to look at how AI can be integrated into the functioning of CA Institute at all levels. “We are focused on bringing AI in ICAI. A roadmap will be prepared to enable AI”, he said.
Agarwal also said that the entire office of ICAI will go paperless from February 28 and ICAI will become an “e-office” from this date.
Disciplinary mechanism
In a big move to enhance transparency in the disciplinary mechanism against erring auditors, the CA Institute has decided to make public (on its website and through press releases) the status of various cases taken up for investigation. The disclosures would also cover pendency before financial reporting review board (FRRB), he added.
This move is significant as ICAI had in recent years come in for some criticism for being soft on its membership and was not found to be taking quick actions against erring members. This had even prompted the government to establish a separate regulator National Financial Reporting Authority (NFRA) to oversee auditors of listed companies and large private companies.
Vikasit Bharat
Agarwal said that ICAI sees the need for the country to have at least 30 lakh chartered accountants by 2047, by when the country aims to be a developed country.
“Our calculations show that we need at least 1 lakh chartered accountants for every $ 1 trillion of GDP. As of today we have 4 lakh CAs for GDP of about $ 3.5 trillion. So by 2047 when our GDP is estimated to touch $ 30 trillion, we should have 30 lakh CAs in the country,” he added.
Last year, the number of newly minted chartered accountants was about 22,000. Agarwal made it clear this need for 30 lakh CAs does not mean that ICAI will dilute its quality of curriculum or training in coming days. He expressed confidence that volume of students in pursuing career of chartered accountancy will only go up astronomically given the opportunities . “There is no unemployment among the freshly qualified period. Average salary for a CA fresher in our placements last year was ₹ 12.5 lakhs,” he added.