Shrikrishna (S) — Arey Arjun, I am waiting here for you since long. You were to come at 5. It is already 5.45.
Arjun (A) — Very sorry, Bhagwan. Got held up in income tax office.
S — Why? Now all scrutiny assessments must be over. April is a relaxing month. Isn’t it?
A — For CAs, there is no relaxation at all. We have to work like donkeys. There is so much harassment for recovery of tax.Clients’ accounts are attached, prosecution notices are being issued like a child’s play.
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S — Is it? Why prosecution?
A — The less said the better. I.T. authorities have innovative brains. They are always searching for new avenues to harass the assessees. And the entire burden falls on CAs – with no fees!
S — Anyway! That’s a permanent headache of our country.
A — I feel, bureaucracy does not want transparency. They don’t want discipline and digitalisation.
S — Why? That will reduce their workload.
A — But they may be having vested interests in allowing the state of confusion to continue. They may be interested in manual intervention, for reasons best known to them!
S — That’s an endless subject. Last time, we discussed the preliminaries of NFRA.
A — Yes. I remember. Now I am worried about bank audits. Days are very bad for CAs.
S — I agree. CAs are projected to be main culprits in all financial frauds. That’s unfortunate. But sometimes, you CAs also behave very loosely.
A — What do you mean? We work round the clock – with no family life. And we are the most underpaid profession.
S — May be! But you don’t follow even simple systems. First and foremost is the time discipline. You people are never on time!
A — It is partly true. But we are always at the mercy of others!
S — You have made yourselves vulnerable; always a soft target. You have allowed yourselves to be taken for granted.
A — What to do? Business community is so dominant! We can’t afford to say ‘no’ to them. They simply go away and catch hold of another CA.
S — That’s the pity. You lack unity. You come together for academic discussions; but never for collective action! And you have developed a habit of ‘managing’ everything.
A — Yes. Even CPE hours we try to ‘manage’. But the recent episode of bank frauds has caused turmoil in the profession. I wonder whether I should do any bank audit at all!
S — If you act methodically, you should have nothing to fear from.
A — But they don’t allow us to work systematically. There are strict timelines. A big branch to be audited in barely 3 to 4 days. And no one co-operates. Poor branch manager alone has to face the music.
S — But what prevents you from keeping your own papers right? Tell me, do you write to previous auditor?
A — Why should we write? Appointment is made by RBI or the Board of a nationalised bank.
S — My dear, Arjun. There is no exception to clause (8). Whosever appoints you, whatever be the organisation, and whatever be the type of audit, writing to previous auditor is a must.
A — But then how can we meet the deadline if we wait for his reply?
S — In this particular context, you need not wait; but writing you cannot avoid.
A — I must keep this in mind.
S — Moreover, you don’t keep working papers. You know that the work should not only be done; but it should be seen to be done. And while doing audit, you should always have professional skepticism.
A — What is that? You mean we should suspect everything?
S — No. Not that way. But you cannot afford to accept everything in good faith and at face value.
A — But when reputed organisations produce documents before us, how can we disbelieve that?
S — But you should learn to verify independently the truth of every statement of a client. He should get a feeling that you verify every document, it has a psychological impact. And when there is slightest of suspicion, you should take it to its logical end.
A — What you say is right. Very often, we just leave it like that. We avoid to escalate the matter.
S — Do you ensure that your assistants are properly trained? Tell me, have you ever read the Standards on Auditing?
A — You mean SAs?
S— Yes. I believe, most of you carry out the audit just by common sense, without studying the relevant material properly. You never make efforts to upgrade yourselves. Do read SA 200 and SA 240 before you do any audit now.
A — But we really slog. We do the work sincerely. And there is no time for documentation and correspondence.
S — That is precisely where you lack. Documentation is a must.
A — I know. There are many big firms. They do not really do much indepth audit; but merely compile thick files of working papers.They command fat fees. All these laws and ethics, I feel, apply only to small people like us. After all, might is right.
S — Don’t say so.
A — I have a few friends who have affiliations with some foreign firms and they enjoy the brand, they do advertising under the corporate shield, they do anything they like. Nobody is going to ask them in our country.
S — Arjun, I understand your grievance. But don’t worry. Now Supreme Court has taken serious cognizance of all these activities of Multinational firms.
A — Oh! When was that? Good, Good. Tell me some details.
S — Supreme Court delivered its decision on 23rd February, 2018. Very detailed discussion. I suggest you read it yourself. But don’t read it just for fun. Learn something from it and try to implement the basic principles of ethics.
A — O Lord! I always obey your commands!
!!OM Shanti!!
Note:
This dialogue is in the context of recent scandal of PNB, ensuing bank audits and also the Hon’ble Supreme Court decision in respect of Multinational Accounting Firms (MAFs). – Civil Appeal No. 2422 of 2018 [Arising out of Special Leave Petition (civil) no. 1808 of 2016].
