ICAI President's Message - October 20

Dear Professional Colleagues,

Our Institute since its very inception, has been immensely passionate about its purpose to propagate progress and has persistently recognised the developments happening around and pursued contemporary reformation and dynamic improvement. It assiduously aspires to attain the absolute best for all its members and is diligently dedicated to their constant improvement and growth. As opposed to being a silent bystander to change, ICAI stands tall as a facilitator and crusader of affirmative action and thereby letting consequent growth and development flow.

The Indian Accountancy Profession has always provided thought leadership to the generations and in a proactive and progressive manner recognised the technological evolution very early. More than five decades back the then ICAI President and past Governor of Madhya Pradesh CA. Rameshwar Thakur noted technological development and said, in the year 1967 - “A great change the Accounting profession in India has to reckon with is the advent of computer age at the international level. Some of the industrial units even in our country have started utilising the services of these devices. The electronic data processing system has almost revolutionised the traditional accounting and auditing functions. The change being swift, has caused a sense of alarm and it is realised that unless the present day and future Accountants get themselves equipped with the knowledge of working of the computers, they would be relegated to the background. As such we have to provide necessary facilities to our members to enable them to meet the new requirements.”

Today, the accounting profession is not relegated to the background, rather has acquired indomitable position. Built on the foundation of tenacity and hard-work, accountancy profession in India has always endeavoured to inspire faith and foster confidence among those within its tutelage by standing tall as a strong regulator and simultaneously a potent educator. Imbibing technology in the internal systems and hand-holding members to acquire new skills has always been a priority whether yesterday or today. The then ICAI President CA. Y.M. Kale said in the year 1996 – “Helping members maintain their professional competitiveness often involves improving their capacity to make effective use of modern technology. In promoting the technical advancement and relevance of accountancy as the language of business, familiarity with computers is now indispensable.”

The Institute, over the years, has garnered paramount respect for meeting business environment changes with decisive action and discerning reaction. Renowned for imbibing technology swiftly and smoothly, ICAI is perseveringly working today to upskill members in Big Data, Artificial Intelligence, Robotic Process Automation and other aspects of technology. By sowing the seeds for a more efficient and effective technology enabled profession, it strives to change the face of the world of accounting and auditing for the better. Even today, many of our members are adept in the most complex aspects of technology and make noteworthy contribution to the business and industry. The nuances of technology are complex and intriguing, and it needs a highly analytical and well trained mind to understand and work in such environment.

Era of Disruption - Technology Empowered Professional Accountant

It is beyond any doubt that technological skills are required by professional accountants in view of its all pervasive impact. A couple of decades back when computers and electronic data processing were making inroads in the business, many were sceptical about their use and potential. At that time nobody could have imagined modern day concepts, tools and technologies. Things have largely changed today as technology has replaced many complex manual processes in life and business. Robots have made inroads and their use is not restricted to manufacturing sector, but has become integral part of many non-manufacturing processes. It is unbelievable that robotics is making great inroads in medical and legal professions. These developments may render many skills possessed by professional accountants as obsolete. With rapid changes, it is very difficult to predict how future will shape-up, but it is certain that accountants need to equip themselves in the newer skills to remain relevant and useful in future. Importantly, professional accountants need to acquire knowledge and skills in the following areas:

• Artificial Intelligence: Artificial Intelligence is replicating human intelligence in machines impacting the profession in a big way. The tools of Artificial Intelligence are being used to provide online accounting services, conduct real time audits and provide financial services.
• Robotic Process Automation: Robotic Process Automation by simulating human actions are helping in automating repetitive tasks taking place as a part of business processes. The area has immense potential in the finance and accounting functions that involve repetitive activities.
• Blockchain Technology: For professional accountants, Blockchains are highly secured distributed ledged systems that are extremely hard to falsify. Information is stored in series of blocks, each of which contain digital information to identify the sender, recipient with time stamp and full history of the transactions involved. Blockchains are secured as creating a false record would need modification in every subsequent block, which generally requires everyone using the blockchain to agree to the fraudulent entry – a scenario very difficult to accomplish.
• Big Data and Analytics: As organisations become digital, more data is generated and shared between organisations, their business partners and customers. Today, businesses consider information as a valuable commodity and its availability in large amounts can help in learning and making changes that can bring success. At the same time, most organisations possessing too much data are not able to cope with it and use it effectively. Data Analytics is a professional opportunity for accountants to use their skills in descriptive, predictive and prescriptive analytics to help organisations to identify newer opportunities of growth.
• Financial technology (Fintech) Services: New technology seeks to improve and automate delivery and use of financial services. Chartered Accountants can help business organisations to better manage their financial processes by utilising computer based algorithms. Fintech is used in a big way in banking sector and has now perpetrated to almost all commercial and not for profit organisations whether engaged in manufacturing or providing services.
• Cloud Accounting: Storing data on remote servers so that it can be easily accessed from anywhere has loosened geographical restrictions. Once data is entered in the cloud, it can be retrieved and used anywhere in the world – whether in office or home or while travelling. Cloud Computing is evolving and its percolating to even medium and small businesses.
• Cyber Risk Management: With the growth of technology, organisations face many security challenges on a routine basis. Accountancy professionals, by equipping themselves with technological knowledge can act as technology consultants to help businessmen in realigning their business to mitigate risk, improve data integrity and better their cybersecurity position. They can provide services as consultants in the areas of cyber risk management that is gaining prominence on account of increased use of mobile technology, cloud computing and social media.
• Forensic Evidence: The domain of computer forensics can assist auditors to collect and use digital evidence. Forensic analysis can be used for information retrieval to reconstruct series of events that have actually taken place. The importance of forensic accounting and fraud detection has increased manifold considering rising incidents of cyber crimes and frauds. Present and future professionals need to be adept in utilising accounting, auditing, data mining and investigative skills to detect fraud or mistakes.

New Age Accounting Profession

In last couple of decades the fast paced economic reforms coupled with technological advancement created a need for unswerving staunch accountants who are committed to the profession, industry, society and the economy. The present challenging times have further strengthened well established position of Chartered Accountants as harbinger of change. With their deep understanding of complex and intriguing financial concepts, proximity to the businesses of all kinds and sizes, the professional accountants can and should play instrumental role in making India truly Aatmanirbhar.

To be future ready, professional accountants should learn and equip themselves in new age technology skills, acquire strategic managerial skills besides continuing their prowess in accountancy, finance, taxation and business laws. ICAI already has curriculum that is benchmarked to the best in the world with unique blend of rigorous training and theoretical education. While maintaining our supremacy, we need to continuously evolve and undertake innovative actions. In this regard, we should keep following aspects in mind:

• Study information about the current and future opportunities: While we are having strong membership base of 3,25,000 plus, the emerging Indian economy needs more accountants to practice and work in industry. Rational planning requires realistic projections of the future demand of accounting professionals.
• Attract entrants with high potential into the profession: It is important to promote the utility of accounting profession in the society to generate interest of the students with high potential. While general perception about Chartered Accountants in the country is positive, it can be further build to enhance perceptions about the need and the career opportunities it offers.
• Provide quality education and training: ICAI from time to time changes its scheme to provide quality education and training. The education for the aspiring professional accountants as well existing members should keep them abreast of current knowledge in the core and related areas of competence. There is need to familiarise them with the new and emergent areas related to professional development.
• Increased liaison between profession and academics: With the dynamic changes in the system, processes, laws and technology there is emergent need for both practitioners and academia to cohesively and creatively foster a culture of innovation with the goal of improving the quality of accounting education in the country. Universities and colleges can work in tandem with the Institute so that basic accounting knowledge is gained by all. The subject faculty are the key driver of change in curricula and pedagogy. Quality of future can’t be ascertained and improved without having capable faculty. In this regard training of faculty members with unambiguous recognition and reward structures can improve the quality of accounting education in the Institute and in the country.
• Encouraging Accounting Research: To build learned and future ready profession there is need for more research in the areas related to accountancy profession. As on date, 105 Indian Universities, 7 IIMs and 2 IITs (Madras & Bombay), total 114 institutions in the country have recognised Chartered Accountancy qualification for the specific purpose of registration to Ph.D. programme. Going forward, flexibility and exploration of new research is quintessential to maintain the quality of delivery of accounting education in future. There is need for more effective research where more professionals join to identify grey areas and charter mechanism to iron out creases.

Assessment / Refresher Course Scheme for the students who have not taken membership or not restored their membership even after lapse for three consecutive years

The Council at its 392nd meeting held on 22nd April, 2020 approved the proposal for introducing an Assessment/Refresher Course Scheme for the students who have not taken membership of the Institute for more than 3 years after qualifying the Final Examination as well as for ex-members who have not applied for restoration of membership for more than three years after removal of name due to non-payment of Membership fee or any other reason. Based on the decision of the Council, the draft amendments in the Chartered Accountants Regulations, 1988 were submitted to the Central Government for its consideration and approval. The Central Government has accorded its in-principle approval to the proposed amendments and has asked the Institute to notify them in the Gazette of India for public comments and re-submit the proposal for final approval of the Ministry after considering the comments received by the Council of the Institute. A copy of the Gazette Notification has been hosted on the website of the Institute at https://www.icai.org/ resource/61210gazette-notification-dated14092020. pdf. A copy of notification and the explanatory note is also included in this journal. While there is still time in the final changes in the regulations and their implementation, it is suggested that the members/ students who have cleared their final examination may restore/take membership of the Institute at the earliest.

Submission Date for Online MEF Form for the year 2020-21 Approaching

Members may note that the last date for submission of online MEF form and declaration for the year 2020-21 is 12th October, 2020. Through MEF form, ICAI collects and distribute members’ data to exploit potential opportunities and facilitate new avenues of professional development and growth. The information collected through MEF form is put forward at appropriate fora for various professional opportunities. These opportunities are not limited to Bank Audit but to tap other important opportunities as well, ICAI is collecting diverse but pertinent information from its members. In the MEF certain new fields have been added to capture varied experience of the members in different fields like Internal Audit, Indirect Tax, Forensic, International experience etc. The MEF application for the year 2020-2021 is hosted on www.meficai.org.

Constructive and Positive Encouragement for a Better Future

“Keep your thoughts positive because your thoughts become your words. Keep your words positive because your words become your behaviour. Keep your behaviour positive because your behaviour becomes your habits. Keep your habits positive because your habits become your values. Keep your values positive because your values become your destiny.” – said Mahatma Gandhi. Constructive and Positive encouragement can solidify one’s resolve. The progress necessitates the grace to accept criticism and the will to channelise it towards its alleviation via consistent improvement. The society is divided into different segments with diverse opinion and dissimilar perspectives about the various policies, processes or systems. Today, we are seeing an unwanted trend of making unverified and hasty comments on the Social Media criticising actions of Government, policy makers, regulators and of anybody and everybody. While critical review and comments keep the true essence of democracy alive, continuous criticism is the breeding ground for negativity that obstructs solution-oriented action. As a member of this esteemed Institute, you can bring the general positivity in the society by having positive approach. Remember, with the recognition we enjoy in the society, we are the key opinion makers. Our Government is taking several initiatives in these challenging times that need encouragement and support of the accounting profession. We should also encourage students to use the social media in an effective and positive manner. We should use our position to bring positivity in the society while restraining from criticising concepts and deeds without being aware of the problems and circumstances.

The unprecedented human tragedy has had a severely adverse impact on the global economy as a whole, giving numerable reasons for the corporate world to panic as the business behemoths, giants, medium and small businesses are equally grappling with the unforseen challenges. The pace of recovery is expected to be a long and painful as business organisations struggle with the upheaval brought by the Covid-19 pandemic. Despite the chaos around Covid-19, impetus to MSME sector has emerged as a critical tool by the policy makers for both living and working. With swathes of opportunities, the accounting profession should focus on innovation on a humongous scale to leapfrog into the post Coronavirus economy. With disruption in the global supply chain, there is a silver lining for India; and it should grab the opportunity both in letter and spirit.

Best wishes. Stay Safe and Healthy.
Jai Hind, Jai ICAI.

CA. Atul Kumar Gupta
President, ICAI