Why Change In Business Environments Isn’t The End Of The World For CA Professionals
Clients, both large and small enterprises have with varying degrees adopted an attitude that compliance is responsibility of the auditor. Regulators and lawmakers have also displayed a tendency to shift the onus of verification of compliance on the auditor.While this may itself present professional opportunities, the fact that it entails additional responsibility must not be lost sight of. The role and responsibility of the client in the compliance process needs to be re-emphasized and steps need to be taken to educate the client.
To illustrate the growing responsibilities, the Income Tax Act alone has about 46 provisions which require an audit or certification by a Chartered Accountant.
The Companies Act and State Laws widen this list. In fact, the responsibilities under the Companies Act, 2013 are so onerous that there is a wide spread belief that they would dissuade a young professional from taking up the profession.
The percentage of CAs in practice to those in employment has dwindled over the decades, clearly indicating that those joining the profession are fewer.
Younger professionals who are better equipped to use technology and newer skill sets are clearly not entering professional practice. Hence there is a substantial gap between demand for good professionals and their availability.
It results in entrusting responsibility to those who are unable to discharge it in the constraints of time and resources. The result is a widening expectation gap, dissatisfaction and disillusionment on both sides.
Then what is the solution?
The solution lies largely within the profession and with little understanding and participation by other stakeholders, can be well achieved.Firstly, users of professional services like auditee, tax authorities and regulators need to understand the scope limitation of professionals. The Institute of Chartered Accountants (ICAI) should embark on a campaign to spread such awareness.
Secondly, lawmakers and regulators need to engage with professionals before bringing in changes that would require furnishing plethora of information. It is futile to collect a large database of information, especially when the ability to utilize it meaningfully is absent.
Finally, and not in the least, professionals have to continuously upgrade their skills. Today and in the near future, the profession will encounter significant challenges through changes by way of the Companies Act 2013, the impending Direct Tax Code & Goods and Services Tax Act, introduction of Converged Accounting Standards, re-thinking of Income bases under International Tax Treaties and so on.
Change would be the only constant factor and one would have to keep running to remain at the same place!
Senior professionals would do well to remember that, while experience acquired over years is invaluable, it is not a substitute for new knowledge and skills. The world is changing quickly and if we do not act it will drive past us.
To summarize, the need of the hour among both professionals and enterprises is to pursue core competencies, focus on the legal requirements and eschew the non-essential. While these challenges exist, a little foresight and fortitude would enable professionals and stakeholders to harmoniously attain their respective objectives.