The Hindu Business Line : CAs told to hone up IT skills

CHARTERED accountants, who are required to be the conscience keepers of the corporate world, are "inadequately equipped" to deal with developments in the field of information technology (IT), according to Mr Y.H. Malegam, Chairman of the National Advisory Committee on Accounting Standards (NACAS).

Addressing the international conference on `Redefining the accountancy profession: A measured response to global challenge', organised by the Institute of Chartered Accountants of India (ICAI), Mr Malegam underscored the need for better understanding of IT among the chartered accountants' community for ensuring proper auditing of enterprises.

``A proper understanding of IT is required to identify the risks to which a business is exposed,'' he said, adding that the chartered accountants are least trained to recognise frauds.

Mr Malegam, who is also a member of the Central Board of Reserve Bank of India (RBI), also highlighted the emerging undesirable trend of ICAI becoming a "body of rule-checkers".

``Faced with the possibility of legal action on their work, auditors are increasingly taking shelter under rules and accounting standards. This is a mindset that we need to correct,'' he said.

On the crisis of confidence in the profession in the aftermath of Enron and other corporate failures, Mr Malegam, who is Managing Partner of S.B. Billimoria & Co, said that chartered accountants are trapped in an environment of certain basic wrong assumptions.

He pointed out that there is a belief among the public that financial statements give a precise picture of the state of affairs of an enterprise. ``In today's environment, it has to be realised that financial statements are an outcome of a large series of judgements by managements, accountants and auditors. They cannot be accurate,'' he said.

Mr Malegam also highlighted the adoption of wrong measures of success within the chartered accountancy firms. ``We tend to award the rainmaker instead of going by the quality of professional work,'' he said.

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