The death of a young chartered accountant, Anna Sebastian Perayil, in Pune in July 2024 allegedly due to work pressure has generated a national debate with an eclectic variety of views. The letter written by the mother of the deceased to the boss of the accounting firm makes it clear that it was work pressure that caused her untimely demise. Anyone who has worked in the environment of a large accounting firm can relate to much of what has been said in that letter.

Finance departments in companies and their auditors are in a perennial race against time to meet deadlines. Every major law in India — the Companies Act, Income Tax Act, GST Act, SEBI (LODR) regulations and the Provident Fund Act to name a few — have deadlines for either filing forms or making payments. Missing deadlines could impact careers and corporate reputations in addition to penal levies.

This forces companies to push their audit firms to meet these deadlines at any cost. Partners in audit firms push this to their managers who in turn push this to those working under them.

The entire supply chain is focused only on ensuring that the deadline is met irrespective of the hours it takes to meet it. The longer hours put in works well for some firms who can charge clients extra. In addition to meeting strict deadlines, over the last decade or so, audit firms in India have another responsibility — defending the audits they have done.

Regulators in India have penalised auditors who have been found wanting in their quality and compliance procedures. Regulators have been forced to audit the work done by auditors due to the increasingly worrying trend of accounting accidents taking place all over the globe — from Enron in 2002 to Satyam in 2009 to Evergrande in 2023. Meeting deadlines and ensuring that audit quality can be defended only add to the pressure on those working on the audit. Defending an audit requires collecting and maintenance of a massive number of documents in a limited time.

As a solution, there have been suggestions in some quarters that laws in India can be a bit flexible on deadlines — giving a sort of a grace period.

This is a welcome suggestion, but it is a fact that in India, if September 30 is a deadline, many would meet the deadline only on that day and not a day earlier — its just exciting to do things this way. Given a grace period, they would simply extend their deadline to the end of the grace period.

Lack of resources

Another factor that many audit firms in India are facing is a lack of quality resources.

Considering all the happenings in the auditing environment over the last decade or so, auditing as a career choice has lost its mojo. Professionals opt for jobs in consulting which offers better emoluments with reduced pressure and minimal risk.

The lack of quality resources forces audit firms to over-utilise the good resources they have leading to work pressure.

Labour laws in India have been enshrined in Chapters III and IV of the Constitution of India. These Chapters have a Concurrent List which empowers both the Central as well as State Governments to pass labour legislation — which is why we cannot have a single law across the country.

Recently, the Karnataka government proposed a law that mandated software companies to employ a certain minimum number of locals. After protests, the proposal was shelved.

The Maharashtra Government has stated that the accounting firm in Pune did not have a registration under the Shops and Establishments Act — an Act that has laid down maximum working hours for an adult at nine hours per day or 48 hours per week. Hence, it is not surprising that, when the comment of Infosys co-founder NR Narayana Murthy that Indians should work a minimum of 70 hours per week met with a lot of criticism.

It is hoped that Anna Sebastian’s episode would force employers to take a deep, hard look at their employee policies. It is possible that professional bodies such as the Institute of Chartered Accountants of India, NASCOM, CII and FICCI would sensitise their members to take a close look at the employee practices at their organisations. It is necessary that regulatory bodies ask entities to provide some data on their employee policies. When everyone takes some responsibility, possibilities of change brighten up.

The writer is a chartered accountant