Dear Members,
April is a month of audit deadlines. There is a race to declare financial results at the earliest, which puts the fraternity of auditors under tremendous pressure. While I understand that every corporate desires to be in the news, I am unable to comprehend what difference it would really make if audited results are put in the public domain a few days later than they actually are. Those in top management are blissfully unaware of the ground realities, and many a time set impossible deadlines. This is true of audits of public sector undertakings, particularly banks. This year has been no different from the past.
The appointments of bank branch auditors were delayed this year on account of a proposal by banks not to appoint auditors for branches below a particular threshold of advances. What was distressing was that the cause for the banks wanting a reduction in the number of branches audited was the cost of audit. Audit has remained a cost centre to business and industry, which cost is treated as avoidable. When a businessman thinks of cost reduction, he looks at the cost of audit, since he does not perceive it to have a value commensurate with cost. In reality, many audit reports send warning signals to stakeholders, which if recognised and acted upon can change fortunes of a corporate. One reason for this may be the manner of presentation of these reports. Therefore, while audits deliver value, they are perceived to be only an exercise for statutory compliance. It is necessary to change this perception.
A mechanism has to be devised, whereby material findings in the course of audit are collated and brought to the notice of not only the powers that be, but also the general public. This is not easy; but if done, the public would become aware of the value of the job that we auditors perform. The public uproar that the recent reports and findings of the Comptroller and Auditor General of India have created is an illustration.
The expectation gap is something that is being discussed for a long time. While the profession must be alive to the expectations of society, the limitations under which an auditor functions must also be brought to the fore. We must point out to stakeholders of business that an audit is an exercise for providing assurance, and hence is neither an investigation nor a fault-finding mission. In fact, a public awareness campaign on a continuous basis must be carried out to ensure that the public understands the job that we perform and the value that we add.
While I am sure that most of us are doing a commendable job, it would be foolish for us to rest on our laurels. We must continuously upgrade our professional skills, and to that extent I am a supporter of the concept of continuous professional education. We at the Society continuously strive to provide excellent programmes for upgradation of members’ knowledge and skills. One such programme on Developments in Accounting, Auditing and Taxation was organised at Kolkata, jointly with the DTPA Chartered Accountants study circle of Eastern India Regional council of the ICAI. Many a time one finds that our colleagues treat a CPE programme as an idle formality, and find ways and means to comply with the letter of the regulation while killing its spirit. While this is true for some professional colleagues, organisers of such programmes must also ensure that education remains the prime objective of these programs, and no collateral purposes are allowed to creep in.
Coming back to the issue of allotment of audits by statutory authorities, I would request my colleagues to strive to give value in the professional jobs that they perform, rather than worry about work allotted by a regulatory body. If we give value, rewards will follow. While it protects the interests of the members, the Institute of Chartered Accountants of India (ICAI), our alma mater should take upon itself the responsibility of changing the perception of our profession with both the public and the authorities, for this is a task that an institution is equipped to carry out, rather than individuals. While one need not lobby for work, a sustained effort to change our image will go a long way in enhancing respect for our profession that it richly deserves. In order to do so, it may call for some necessary changes in the regulatory framework of the profession.
It has been some time since the change of guard at the ICAI. Recently, we at the BCAS had an opportunity to interact with the President and Vice President of the ICAI during their visit to the Society’s office. The current President of the ICAI concurred with the subject of education, which is close to his heart. We at the BCAS are confident that during his tenure he would address many of the issues that have been raised in this communication. We wish him and his team success in their endeavour!
With Warm regards,
Pradip K. Thanawala
