The last few years have witnessed a digital metamorphosis of the financial sector. The market has no boundaries – the financial transactions are happening on multiple platforms interconnected through Application Processing Interface (API), web-based applications. Payment modes are digital – QR Codes, Unified Payment Interface (UPI) based, Tap and pay. Biometrics of individuals are captured by different vendors in discreet ways – facial recognition, fingerprints, patterns on various devices, etc., Use of Artificial Intelligence (AI) in various aspects of business like – customer service, automation of business processes, data analysis and financial reporting. The way we conduct financial transactions is also changing in the risk landscape. Businesses are exposed to cyber security risks and fraud risks.
All this has necessitated a change in the way Chartered Accountants have to function, design audit procedures, use AI assistance in the performance of audit procedures.
Let us understand the challenges Chartered Accountants face and how we all have devised enablers to cope up with these challenges:
S No | Challenge | Enabler |
|---|---|---|
1 | Due to use of multiple systems, web-based applications, APIs with third party vendors’ systems, tracing the transaction from origin till completion gets difficult. | Information Systems Audit is conducted.
ICAI offers post qualification course Diploma in Systems Audit (DISA) for the members. Chartered Accountants learn the techniques of auditing through the systems.
CAs today have the technical competency to understand and test the architect of the system, the system workflows, Business Rule Engines (BREs) adopted by the entities.
Cyber security, information security, Mobile App Testing, Web applications testing - all these can be comprehensively be covered in the audits.
|
2 | Big Data is used – there is lot of data at the disposal of auditors. Manual processing of the data to get insights is humanly impossible. | Data analysis tools are used by the chartered accounts to
For instance, Alteryx, Tableau, Power BI, Python, SAS |
3 | Many activities are outsourced to third party vendors and there is exposure to outsourcing risk. | Regulators have advocated adherence to Outsourcing Guidelines by business entities. CAs review the governance structure and controls pertaining to outsourcing. |
4 | Use of Artificial Intelligence in process automations has posed challenges in terms of:
| ICAI has provided opportunities for members to excel in AI through:
Further, CAs can use Deep Learning (use of artificial neural networks) to perform sophisticated computations on large amount of data.
CAs also evaluate the backpropagations performed by the process owners on the test data. XAI – Explainable Artificial Intelligence can be used to adhere to evaluate ethics in AI. Updates in the algorithms to adhere to the applicable /revised laws and regulations can be tested by the CAs.
Natural Language Processors (NLPs) can be used to understand complex documents, voice data, evaluate customer experiences of the entity.
|
Conclusion: While there are challenges, there are new areas of professional opportunites too. CAs are all set to explore new opportunities that are coming with the digitisation.
_20240701120452_original_image_20.webp)
