The Hindu Business Line : A head for figures

When the going gets tough, the tough turn to technology. And so it is with the Indian chartered accountant trying to cope with new demands on his job.

As India emerges a major outsourcing hub for auditing, risk and business compliance services, the role of auditors, particularly the chartered accountant, is poised for a major change, says S. Gopalakrishnan, Partner, Auditing and Consultancy firm, PricewaterhouseCoopers (PwC).

Gopalakrishnan, who is member, Central Council, The Institute of Chartered Accountants of India, and Founder Head of the IT body within ICAI, in a free-wheeling chat with eWorld, spoke about the changing role of CAs, and the need to groom them to new challenges.

This has meant a multi-pronged strategy for the Institute, by way of offering skill upgradation through online learning modules and also changing the curriculum with lots of inputs on technology, he says.

While it is projected that the demand-supply gap even within India is about 50,000 professionals, with total strength of about 1,50,000 and about 70,000 of them practising, this is likely to go up significantly over the years. “But the gap will only widen,” he adds.

While it is difficult to gauge the size of the outsourced auditing business, this is poised for growth even if some competition comes from other emerging markets. Moreover, the number of new CAs entering the profession globally is coming down. It is only in India that this number is likely to grow even though there might be some shortfall, he stresses.

Audit costs in the US and the UK are steadily going up due to shortage of professionals. Large firms there do not take up the work of small businesses. All such work is up for grabs, he says.

Worldwide, outsourcing of business processes has increased, most of the IT processes, including technology asset management, are handled by third parties. Therefore, a company may be registered anywhere but operations here, however small or big, need to comply with various regulations, he points out.

Right from electronic filing of returns for tax deduction at source and for IT returns, auditing professionals need to be abreast of regulations such as Sarbanes Oxley in the US, Clause 49 in India, and Basel II norms for the banking industry.

In addition, an auditor has to be conversant with eXtensible Business Reporting Language (XBRL), which is gradually getting accepted globally.

Apart from the need to understand how enterprise resource planning systems work, CAs are required to carry out pre and post implementation reviews of applications, while also assimilating how international payment reconciliation processes work.

Business can be handled in one country, payment made in another, and money deposited elsewhere.

Due to changes in the communications landscape, auditors and professionals have access to servers anywhere in the world.

From India, it is now possible to carry out a part of the audit work of global companies, conduct security audits, and provide accounting and reporting services, he says.

Distance has become irrelevant in this connected world and this means, a chartered accountant has to define and redefine himself to capitalise on domestic and outsourced business, points out Gopalakrishnan.

“This opportunity will only increase as it is seen that the number of people opting for the auditing profession has come down in other regions. Therefore, ICAI is encouraging more people to take to this career,” he says.

Alongside, the institute is wooing more professionals to take up auditing careers, as many who pass out are seen to be opting for opportunities in other sectors such as financial services and manufacturing.

Already IT bodies such as Nasscom have identified this as another growth opportunity.

Though there could be some competition from some emerging markets, no other country is in such an advantageous position as India, Gopalakrishnan says.

vrishi@thehindu.co.in