GUIDE TO BE DIGITAL CHARTERED ACCOUNTANT
The recent pandemic of COVID 19 has thrown new challenges to the Chartered Accountant firm as they have been forced to conduct the audit from remote location mainly due to the lockdown imposed by the Government which resulted in travel restriction to client location. The reliance of technology has increased manifold as most of the Chartered Accountants were working from home. The challenge was to ensure how the technology was deployed and how quickly the CA firms innovate and adopt to the new technology irrespective of age, experience or expertise. The adoption of IT no longer remains a choice. It is critical for the firms to consider effective implementation of IT infrastructure to obtain the desired results.
Understanding the requirement
One of the key considerations for CA firms is to implement IT at a strategic level. Although most of us use IT in our daily activities like sending WhatsApp messages or mails, for effective implementation of IT, it is necessary to have a strategic plan and a budget for IT infrastructure. When we refer to the term “IT infrastructure”, it refers to infrastructure which has a long-term impact. Further, while deciding the IT infrastructure, it is also important to understand the preparedness of not only the staff working in a CA firm but also the clientele base the CA firm is having. For example, if the firm has implemented G-Suite and the most of the clients are not able to use it, investment in G-Suite would be futile. Thus, it is imperative to have discussion with the existing clients in understanding and identifying their expectations from the perspective from the existing services rendered and expectation of clients in the future. This discussion will help in understanding the ways in which service to the clients may be enhanced through use of IT. One of the challenges a firm would generally face during investment in IT is the fast-changing IT technologies. Thus, the strategy / plan should be sufficiently flexible to be able to adapt to the changing technology and the potential avenue of services.
Considerations to Develop IT Plan
When we are discussing the Information Technology, it encompasses hardware, software, systems, methods and the standard procedure followed in the firm which includes computer & telecommunication equipment, operating system software, communication software, office automation / support system. Since, the clientele has become digital, the firms need to think about the office automation with respect to processing and analysing data which are generic in nature, automated regulatory compliances can be performed digitally. Most of the compliances can be performed only by using automation, method of exchange of communication (most relevant during lockdown) and the data privacy. Due to the frequent changes taking place presently, the CA firms generally focuses on specific area of services or it may have multiple partners who are taking care of specific area of services. Thus, during developing the plan the nature of services rendered at present and the proposed nature of service which can be rendered in future might be taken into consideration.
Following could be the key considerations for developing of IT plan:
- Review of existing IT infrastructure and challenges faced
- Delivery of IT services to the client and readiness of the clients
- Existing IT skills and competencies at the management as well as staff level
- User culture and training environment
- Review of existing & emerging opportunities
- Areas which will require change in the existing internal process / procedure
Identification of existing gaps in IT
It is imperative to understand the existing gaps in IT and the expectancy of the deliverables to the clients. Following is few of the areas which may require attention before investing in IT infrastructure on the basis of priority:
- Availability of Corporate email IDs for their staff
- Presence in social media
- Structured leave management system
- Centralized server management system
- Automated back-up system
- Time sheet management system
- Presence in the social media
- Use of automated tools / Data analytics tools used during the audit
- Review of the IT controls before the start of audit
- Tool for audit planning, scheduling, resource deployment, tracking of time taken etc
Based on the priority given to the above items, various solutions can be evaluated.
Considerations for specific areas
- RAM: Higher the RAM, faster is the processing capability. It is recommended to have 4GM RAM. Enhancement of RAM is possible at later stage
- Hard disk space & type: SSD servers guarantees top of the line performance as compared to HDD servers which are relatively slow. With respect to space of hard disk of a CA firm using Tally and on-premise tax software a server with minimum storage of 512 GB to 1 TB would be sufficient.
- Speed of processor: The processor is often referred as the brain of the computer. Speed of processor is measured in gigahertz (GHz). The higher the measurement, the faster the processor.
- Understanding the requirement: The software to be procured should not only be able to cater the current needs, but it should also be able to cater the needs for next 3-5 years. Thus, proper IT planning plays a crucial role in this regard
- Understanding the model of deployment: Presently, software has two models of deployment. On premises (installation at the local office / server/ network) or Cloud based model (SaaS model) which can be used over internet. Before procurement of software a careful analysis of cost -benefit has to be made
- In connection with process: It is important that the existing process of the firm has to be in accordance with the functionality of the software. The flow of the software may not support the existing process or vice versa.
- Testing of software with real use cases: It is recommended to test the software with the real use cases over a reasonable period of time before making final decision.
- Training & support: Information of training & support should be available from the software provider upfront and on-going basis for any upgradation.
- Considerations in data migration: Identify the process of data migration from the old system to the new system.
Virtual CA firm has become the need of the hour. It only makes business logic for CA firms to gear up to adopt technology at the earliest. This requires a fundamental shift in the mindset of the firms and adequate toolset which can help the firms to mature in their digital journey. Since different CA firms has different area of practice, one-size-fit-for all approach cannot be followed. While planning, it becomes very important to decide the future course and to select right hardware and software requirement.
Source: Strategic Roadmap for CA firms to operate as Virtual firms by ICAI
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