It’s Diwali time and all of us are geared up for Diwali celebrations from 3rd November. Festivities are in the air. With retractment of our unwanted guest Covid who invaded our homes and caused agony for almost 18 months, there is rejuvenated vigour with which all have geared up to celebrate this year’s Diwali. The way we celebrate has undergone change and I am sure we all shall be conscious enough and will not throw caution to the wind. The best Diwali wishes this year will be to remain healthy with no further disruptions due to the pandemic. I convey my Diwali wishes with the following shloka:
To be successful one has to lay down goals with vision for tomorrow. We shall have powerful tomorrows emanating from the powerful goals set today. A goal-setting exercise enables one to come out of the comfort zone and accept the challenge of transitioning and achieve growth. My GURU Mahatria Ra has aptly described this evolution as follows:
Before change there is comfort.
After change there is again comfort.
But the transition, during the change, is never comfortable.
So, growth is your willingness to evolve from
lesser comfort to higher comfort,
through ‘NOT’ comfortable transitions.
At the start of this New Year, let us resolve to seed ambitious goals which shall be followed with conviction and courage so as to become better professionals and human beings.
On the economic front, India’s performance in exports has been phenomenal during this year. It is set to achieve the target of USD 400 bn. However, the rising crude prices are acting as a dampener which have increased the import bill and are offsetting the fast growth in export earnings, thereby affecting the balance of payments position. The stock markets have been on a roller coaster ride during the past fortnight with very high volatility and wiping out substantial gains registered earlier during the month. The major reason for volatility has been a sharp sell-off by FIIs to book profits at higher valuations due to downgrade of Indian equities by foreign brokerages. However, the underlying tone for the Indian economy and capital markets is strong. This is further endorsed by Chris Wood, Global Head of Equity Strategy, Jefferies, the author of GREED & Fear. He has stated ‘If GREED & Fear had to own one stock market globally for the next ten years and not be able to sell it during that period, that market would be India’.
The profession is passing through times when there are shifts in the expectations from professionals by the industry, regulators and policy makers. It is interesting to observe the views of two regulators on the auditing profession.
In my message last month, I had elaborately dealt with the Consultation Paper released by the National Financial Reporting Authority (NFRA) on Statutory Audit and Auditing Standards for Micro, Small and Medium Companies (MSMCs). The Consultation Paper tries to project that there is less or no utility of audits for MSMCs and audits can be discontinued for certain size of companies.
On the other hand, Mr. Shaktikanta Das, Governor RBI, while speaking on 25th October at the National Academy of Audit and Accounts, dealt with the ‘Role of Audit in Modern Financial System’ during which he stated as follows, ‘The responsibility of risk management primarily rests with the Supervised Entities themselves; however, audit too has a critical role to play at the systemic level by examining the appropriateness of existing frameworks for plugging the control gaps and providing assurance to the Board and decision-makers’.
It is beyond doubt that audit is the first external line of defence for identification of issues and risks associated with the auditee enterprise which enables timely intervention to address issues and mitigate risks.
BCAS has floated a Survey on NFRA – Consultation Paper, September, 2021, soliciting the views of companies on the utility and necessity for statutory audit. We are receiving encouraging response to the Survey. We shall be collating the responses and include the findings in the representation to be made jointly with other associations on the Consultation Paper.
At BCAS the activities of imparting knowledge continue relentlessly with workshops and seminars being conducted by various committees. Several areas of professional interest were covered during the previous month, with (i) Workshop on Taxation of Partnership Firms – Section 9B & 45 (4); (ii) Seminar on Charitable Trusts; (iii) Curtain-Raiser on Enterprise Risk Management for CAs, jointly with IRM India affiliate; (iv) FEMA Master Class on Controversial Issues, jointly with CTC; (v) Internal Audit 101 – Basics of IA; and (vi) Webinar on Covid and CSR-Related Expenses, jointly with IMC, BCCI and CTC. There was also an interactive session to guide the students for achieving success at CA exams.
BCAS has also unveiled its iconic event, the 55th Residential Refresher Course (RRC). It is to be held from 24th to 27th February, 2022 in hybrid mode. After the Virtual 54th RRC on account of the pandemic, there were requests to have a physical RRC. Though we are not completely out of the pandemic, it was decided that we shall plan a ‘Hybrid RRC’ so that we can cater to the requests of both categories of participants. The physical event will be at Radisson Blu Hotel at Nashik and will also be in virtual mode for members who want to be connected remotely. I request members to enrol immediately for their physical presence as we have restricted the attendance to 100 participants and the response has been encouraging – we may have to stop registration in the near future. It is a great mode of learning, networking and unwinding.
To conclude, I am sure that at the turn of the New Year as per the Hindu calendar, we shall all endeavour to make decisions and act upon them so as to address the issues which we encountered in the year gone by. This will enable us to face the future with renewed hope and positivity. I leave you with a quote of my GURU Mahatria Ra, to enable you to act positively:
Time does not solve problems.
Rather, time makes you comfortable with problems.
You learn to live with them.
Making decisions and acting upon them alone will solve problems.
The only way you can improve any situation is by making fresh decisions and execute them.
Best Regards,
Abhay Mehta
President
