CAs In India: In Continuous Evolving, Adapting Mode

Over the years, the role of Chartered Accountants (CAs) in India has undergone a significant transformation, expanding beyond their traditional responsibilities. Previously regarded as bookkeepers, accountants, and auditors, CAs have evolved to become conscious keepers of the nation, offering assurance and expertise in various domains. Today, CAs play advisory and consulting roles, demonstrating their ability to adapt to the changing business landscape and embrace technology as an enabler rather than a disruptor.

Aniket S Talati, President, Institute of Chartered Accountants of India (ICAI) points to the evolving Artificial intelligence (AI) paradigm that is nudging the accounting profession to readapt itself and move towards specialization and tasks involving more objectivity, cognitive ability, and behavioural skills to be relevant. “It is also important to understand embracing Artificial intelligence as a partner and explore its potential to expand our ability, while in no sense it is a threat as an auditor’s irreplaceability stems from their experiential knowledge, capacity to employ professional scepticism, and proficiency in making the most appropriate professional judgments during audits, qualities that no machine, process, or system can replicate in this era of commonly available AI tools. I would urge all of you to make technology your best friend for life and derive competitive advantage,” says Talati. 

A few months ago, the ICAI had prepared the new curriculum and sent it to the Union government for final approval. "After the necessary approvals on the new curriculum the CA articleship program will also be reduced from three to two years," the ICAI president had said. This is a welcome news for thousands of students and aspiring CAs. Currently the duration of the articleship in CA course is three years. Under the provision it is mandatory for the aspirant to undergo the first two years of the training period with a practicing CA firm. However, in the third year, there is an option of choosing between either continuing the training under the same practicing CA or going for industrial training with a CA in industrial employment."Under the new curriculum, ICAI has notified draft CA Regulations proposing to reduce the time period of mandatory articleship to two years, Talati said.

With more than 3.75 lakh members and over 7.80 lakh students, ICAI is the world's second largest accounting body. Through its five regional councils, 168 branches, 45 overseas chapters and 33 representative offices, the institute is taking forward its agenda of inclusive growth and continues to add glory to the profession.

Tradition vs Reality

Traditionally, CAs were seen as professionals responsible for financial statements, audits, and tax-related matters. However, their responsibilities have expanded beyond these areas to encompass a broader spectrum of services. CAs now provide assurance not only in finance and accounting but also in income tax, internal audit, management audit, supply chain, sales, and human resources.

As the industry and business environment have evolved, the role of CAs has also adapted to meet the changing demands. While they continue to be assurance providers, their involvement extends beyond auditing and assurance functions. Many CAs now hold key positions within organizations, serving as Chief Executive Officers (CEOs), Chief Financial Officers (CFOs), and other high-level executives. This shift reflects the recognition of their expertise and the value they bring to strategic decision-making processes.

To remain relevant in today's dynamic business environment, CAs must possess a diverse set of skills and competencies. Technological advancements have played a crucial role in shaping the profession. CAs need to stay updated with the latest advancements and view technology as an enabler rather than a disruptor. The Institute of Chartered Accountants of India (ICAI) offers various upgrade programs to equip members and students with proficiency in tools and platforms such as Enterprise Resource Planning (ERP) and other accounting software.

In addition to technological skills, CAs are increasingly embracing advisory and consulting roles. Their extensive experience and interactions with different industries have positioned them as trusted advisors to businesses. They offer valuable insights across sectors and provide sector-agnostic advice, offering a broad perspective.

ICAI is doing its bit to stay ahead of the curve. ICAI has conceptualised and developed an innovative concept of Unique Document Identification Number (UDIN) under which a unique number is now generated for every document attested by a Chartered Accountant in practice and registered with the UDIN portal. As on April 12, 2023, around 4.89 crore UDINs have been generated and 1.38 lakh members have registered themselves on the UDIN portal, Talati explained. 

Acquire New Skills

In order to remain relevant in today's dynamic business environment, CAs need to acquire new skills and competencies. Keeping pace with technological advancements is crucial, as technology plays a vital role in the profession. The Institute of Chartered Accountants of India offers upgrade programs to ensure members and students have access to the latest technologies. While the technical skills possessed by CAs are considered among the best in the world, staying relevant requires continuously updating their technological proficiency. Proficiency in tools and platforms such as Enterprise Resource Planning (ERP) and other accounting software has become essential.

The profession of Chartered Accountancy has embraced advisory and consulting roles beyond the traditional ones. CAs have excelled as trusted advisors to businesses, leveraging their extensive experience and interactions with different industries to provide valuable insights across sectors. They offer sector-agnostic advice, providing a broad perspective that goes beyond specific industries. With exposure to various areas of organizations, CAs possess a comprehensive, 360-degree view, enabling them to serve as effective consultants and advisors in functions such as purchase-to-pay (P2P), revenue and receivables (R2R), and production.

Fraud prevention is another area where CAs contribute significantly to corporate governance. Forensic accounting and fraud detection have gained prominence, with the Institute developing a robust forensic accounting and fraud detection course called FAFD. To address the expanding scope of forensics, the introduction of forensic accounting and investigation standards (FAIS) is underway. Chartered Accountants specialize in various types of forensic activities, including digital forensics in response to increased digital transactions.

The implementation of the Goods and Services Tax (GST) in India brought about significant changes in the practice of professionals and the way business is conducted. The consolidation of various taxes into a single set under the GST required stakeholders to adapt to the new system. However, the government has taken proactive steps to improve the robustness of the system and cater to the needs of businesses and professionals, ensuring ease of doing business remains a priority. Agrees S. Ravi, a seasoned CA, promoter and managing partner of Ravi Rajan & Co. LLP. He says: “GST has been a significant factor in the past five to six years. It has become a substantial component, alongside specific tax practices, both indirect and direct taxation, international taxation, transfer price mechanism, and valuations, including business valuations and forecasting. Consequently, the landscape has shifted dramatically. Additionally, the field of insolvency has emerged as a new area that has expanded the scope of services provided.”

The establishment of the National Financial Reporting Authority (NFRA) in 2018 has brought changes to auditing and accounting in ICAI and the overall CA ecosystem. NFRA has replaced the advisory body that advised the government on accounting standards, while the standard-setting function remains with the ICAI. NFRA has been granted regulatory responsibilities under the act, but coordination and collaboration between the ICAI and NFRA continue to ensure a congenial relationship for the standard-setting process.

“The increased proactive interventions by the market and sector regulators have also increased the complexities that auditors must grapple with. NFRA's actions have also kept auditors alert and mindful of the need for audit quality,” says Vishesh C. Chandiok, CEO, Grant Thornton Bharat.

Despite the advancements in artificial intelligence (AI) and machine learning (ML), human intervention in auditing and accounting services remains essential. The expertise of CAs is crucial in responding to notices from the Income Tax Department or handling scrutiny under the Income Tax Act. While AI and ML can save time for professionals by automating routine tasks, their reliability and accuracy have limitations. Human professionals possess the intelligence to assess and judge the outputs of AI systems, making their role even more critical. Technology can be an enabler, allowing professionals to focus on higher-value tasks, such as advisory and consulting services, which are financially rewarding and intellectually stimulating. Agrees Chandiok. “Digital transformation has become the need of the hour. GTBharat has been at the forefront of India’s most complex and largest fraud investigations. Our experts use technology-driven solutions, utilise advanced data analytics tools and techniques to identify patterns, anomalies, and potential red flags indicative of fraud,” he adds. 

Undoubtedly, the role of Chartered Accountants in India has evolved into a multidimensional profession, extending beyond traditional bookkeeping and auditing functions. By leveraging technology as an enabler, CAs can redirect their efforts toward higher-value services and contribute to the growth and success of businesses in the dynamic business environment.