Pandemic, Technology And Impact On Chartered Accountancy

C.A. Nihar N Jambusaria, President ICAI, speaks to Ms Urvi Shrivastva of BW Businessworld about the latest developments under The Institute of Chartered Accounts of India (ICAI). In an exclusive interview, he talks about the impact of pandemic on CA exams, development of new skill sets, leadership, and new initiatives taken by ICAI.  

Q This is your third term as ICAI council member. Given the unprecedented times we live in, how will this term be different from the previous two ones?
Last year was an unprecedented year and brought a mammoth change in the world. The unparalleled challenges arising out of COVID-19 pandemic; which is yet unfolding; have impacted the professional and social strata altogether. However, the ICAI continued its services without any interruption or slackness throughout the period of lockdown using technology to the maximum. ICAI has always remained at the forefront for taking technological initiatives. Despite all the challenges faced due to restriction on physical movement, ICAI initiated various reforms to ensure that the profession is not only having inclusive growth but also ensured that its members & students are kept updated on various professional matters of contemporary relevance.

In these times of pandemic, ICAI is putting technology to optimum use for efficient delivery of services and betterment of the professional capabilities. The manner in which artificial intelligence, robotic processes and data analytics are taking over, it is pertinent for our members to be well versed with technology as without the same, it would not be possible to serve the clients effectively and efficiently.

ICAI’s technology driven initiatives of DCMM, UDIN and Digital Learning Hub are well recognized, used and acknowledged by various professional organisations globally. In fact, we have offered our digital learning platform to the members of many foreign institutions on complimentary basis. The Institute will further work towards leveraging tech-driven innovations to give CA profession a winning edge and raise a generation of global professionals. Continuing further we will ensure that the profession is suitably skilled for the new age societal requirements such as Forensic, Data Mining and Artificial Intelligence.

ICAI has set up a “Sustainability Reporting Standard Board” in 2020, to what extent has it been successful?
ICAI, a statutory body under an act of parliament and regulator of accountancy profession in the country, has a strong tradition of service to the country towards sustainable economic development. Moving forward in this direction, ICAI has set up Sustainability Reporting Standards Board which is working relentlessly to augment the culture of accurate and reliable non-financial reporting, develop reporting metrics for Sustainable Development Goals (SDGs), benchmarking sustainability disclosures, strengthening assurance frameworks for non-financial information and capacity building of the profession. Further, to strengthen the sustainability reporting in the country, ICAI has developed “Sustainability Reporting Maturity Model (SRMM) Version 1.0” with an objective to bring out a comprehensive scoring tool based on report of the Committee on Business Responsibility Reporting constituted by the Ministry of Corporate Affairs (MCA) in August, 2020. In order to be more transparent and responsible towards the society at large, now-a-days organizations are adopting triple bottom line approach – People, Planet and Profit. This Sustainability Reporting Maturity Model (SRMM) would form the foundation for benchmarking sustainability reporting of Indian corporates. The ICAI through the Board is working towards identifying and developing opportunities for Chartered Accountants in Sustainability Reporting, develop audit guidance for Integrated Reporting, take adequate steps to enhance knowledge of members and other stakeholders by conducting workshops, seminars and courses, publish technical literature on various important topics within sustainability domain and interact with International, National Bodies as well as Regulators to promote policies and regulations towards achieving sustainable development. The Board is working towards upskilling the members in this emerging sustainability ecosystem for contributing in attainment of the global call of sustainability through its various activities.

Q. ICAI is planning a nationwide financial and tax literacy drive, why is there a focus on MSMEs in particular?
Literacy in the financial matters empowers one in the present complex commercial world. Education in financial matters including those related to accounting and taxation can empower individuals and businesses alike. Post pandemic, the expectations of the government, business and society from Chartered Accountants have grown manifold. As part of its agenda, the Institute would work on developing material in layman’s language and also a website would be launched for disseminating knowledge on financial and tax literacy. ICAI would conduct training programs for general public and society at large. ICAI is the important constituent of eco-system for Environment, Sustainability and Growth (ESG). At ICAI, we feel that an educative drive in the country particularly for the MSMEs who sometimes miss compliances or could not manage accounting and tax matters out of ignorance or absence of professional advice will be a big service not just to business community but also to the nation and can be a great catalyst for change and make India Aatmanirbhar. Make in India and Aatmanirbhar Bharat are major national programmes designed to facilitate investment, foster innovation and build reliable manufacturing infrastructure in the country. Chartered Accountants with close proximity to the business, industry and entrepreneurs can work with the focus areas of MSME and in different sectors. ICAI released a MSME rebooting checklist and launched Mentorship Program for providing support in Make in India project of the Government of India. More than 100 facilitation centres for GST & MSME were also launched towards developing Aatmanirbhar Bharat. Our target for this literacy drive is that segment of the society and corporate world which have lesser resources to seek this sort of advice. In the current year, to give focussed impetus to the Indian economic mindset, ICAI has set up a “Committee on MSMEs & Start-up”. Through this committee, we will endeavour to support Ministry and Government bodies in building an enabling ecosystem for Industry, MSMEs and Start-ups by collating suitable inputs for framing growth oriented policies.

Q. The Companies Act is being simplified by the government. What is being done in this regard and how will it impact the country?
To facilitate and promote ease of doing business and ease of living for law-abiding corporates in the country, the government of India has adopted the policy to decriminalize non-compliances of minor, technical or procedural nature of violations. For this the Companies (Amendment Act), 2020 has been notified and further, to this, the Report of the Company Law Committee has been issued to decriminalise LLP Act. As a part of Government of India’s Ease of Doing Business (EODB) initiatives, the Ministry of Corporate Affairs has also deployed a new Web Form christened ‘SPICe+’ (pronounced ‘SPICe Plus’) replacing the earlier SPICe form. This e-form offers 11 services by 3 Central Govt Ministries & Departments. (Ministry of Corporate Affairs, Ministry of Labour & Department of Revenue in the Ministry of Finance) and State Governments (Maharashtra and Karnataka), thereby saving as many procedures, time and cost for Starting a Business in India, and to further make it convenient for the stakeholders, the Ministry has issued FAQs on its website and a web tutorial explaining how companies can be incorporated using this e-form.

The introduction of ‘SPICe+’ has substantially reduced the timelines for incorporation of foreign companies in India as well. Moreover, to further promote ease of doing business, companies with an authorized capital up to INR 15,00,000 has been allowed to be incorporated through SPICe+ without any filing fees i.e. ‘Zero Filing Fee’ concession is being granted. Amendments related to change in the definition of a listed company, the introduction of e-form MGT-7A (separate form of Annual Return) for small companies and One Person Company (OPC), are another few examples of acts taken up by the government to implement ease of doing business in India. Not only this, to strengthen enforcement, promote Ease of Doing Business, enhance user experience, facilitate seamless integration and data exchange among Regulators, the MCA has designed version 3.0 which is expected to be launched in Fiscal 2021-22.

Q. When we talk about GST, how has the role of a Charted Accountant changed since the new act has come into place?
In today’s world, Chartered Accountants are playing a stellar role towards growth of the economy and are contributing in various ways as Partners-in-Nation-Building. CAs are one of the major catalysts in the collection of revenue for the government, be it in from income tax or collections from GST. Being a facilitator of GST implementation, ICAI is undertaking many steps to support the Government and stakeholders. The Institute created awareness regarding GST by organizing programmes & seminars, releasing publications, webcasts & providing technical inputs etc.

Recently, we met the Hon’ble Finance Minister to discuss ICAI’s representation regarding the removal of requirement of audit and certification of reconciliation statement by a Chartered Accountant under CGST Act. It was submitted that GST Audit is not an avoidable compliance. GST Audit by a Chartered Accountant ensures maker checker concept thereby detecting inconsistencies, lapses, errors, and ambiguities, if any, in complying with the provisions of GST law. The Audit should not be seen as a cost to the taxpayer, rather it is an investment for him, the benefits of which are reaped over a period of time. The taxpayer can take corrective actions for irregularities/lapses detected during the audit thereby saving avoidable costs in terms of interest and penalties. Further, audit also helps the taxpayers in saving on litigation expenses as errors are noticed and addressed in time.