Dear Members,
India continues to witness a
spike in new cases of Covid-19 and mounting casualties. The number of active
cases is close to 30,000 patients as of date. The silver lining in India’s
casualty number, however, is our low fatality rate of 3.3%, which is almost as
low as South Korea and China. Our Nation continues to battle bravely to cope
with and against the spread of this pandemic. I take this opportunity to salute
the real heroes, warriors who are fighting this war for us, all the sanitation
workers, medical staff, health workers, police and other officials continue to
put their own life at risk for the safety of others.
Social distancing and lockdown is
the best option available to control the spread of the virus. Lockdown hurts
the economy but saving lives is more important at this stage. But the lives of
millions of migrant workers and daily wage earners also depends upon their
livelihood, and they can survive this lockdown only if the Government can
provide for their basic sustenance.
We have entered the third phase
of the lockdown, and by the time this message reaches you, the country would
have gone through more than 40 days of lockdown. These lockdowns have brought
most of the economic activities, investments, exports, discretionary
consumption and spending to a standstill. Only essential goods and services and
public services are allowed to operate, resulting in a substantial economic
loss to the country. Our economic growth had already slowed down before the
outbreak of this pandemic and now we are faced with this unprecedented problem.
Hopefully, soon there will be some relaxations and opening up of normal
activity in a phased manner over time. According to World Bank, Indian economy
is expected to grow 1.5 per cent to 2.8 per cent (and even that sounds
optimistic) in the financial year 2020-2021, which will be the slowest growth
rate recorded since the economic reforms of 1991. It is not whether we get
knocked down; it’s more important whether we get up. Our future is in our
hands, and I am confident that we will emerge stronger after this crisis and
will be well on our way to recovery much before the advent of the monsoon.
We at the BCAS, have also
converted this challenge into an opportunity and have immediately moved into
action to stay connected with our members. We have organised various online
events, lectures, courses and panel discussions. I am happy to inform you that
during this phase on the lockdown, we have successfully held more than 30
online events reaching out to approximately 20,000 viewers resulting in almost
40,000 person-hours of training. The videos of all these events are available
for viewing on our YouTube channel, free of cost. In these challenging times,
we are committed to our members and would also like to thank all our members
and online viewers for their continuous love and support. It is also heartening
to know that we added more than 1,500 new social media followers, and now we
have close to 37,000 social media followers in all. I would request all of you
to stay updated and connected with BCAS on our social media platforms
of LinkedIn, YouTube, Twitter and Facebook at bcasglobal.
Another challenge to our
profession this year will be the conduct of bank branch audits of public sector
banks (PSB). April has been the month where many of our fellow professionals
have been busy with these bank audits. This year, due to the lockdown executing
these audits has not been possible. There were representations made by the
Indian Banks’ Association to RBI to restrict with the number of bank branch
under audit and relaxation in the audit coverage to 60% of bank’s portfolio in
the current year; however, ICAI made representation on this matter, on the
grounds of scope limitation to do an audit objectively, detrimental to public
faith and against the law of the land and the auditing principles. On 27th
April 2020, RBI has communicated to all PSB and relaxed the guidelines for bank
branches to be audited for FY 2019-2020. The revised guidelines continue to
cover the 90% of all funded and non-funded exposure of the bank and all
branches with advances of Rs. 20 crores and above to be compulsorily audited
but has relaxed the requirement of compulsory auditing 1/5th of the remaining
branches. This, in my view, will leave a considerable number of branches out of
the audit scope and may adversely affect our fellow professionals. The
unfortunate reality is that Bank branch audit fees form a significant portion
of fees for the profession.
Another challenge this year will
also be to conduct the audit remotely without visiting the branches. The IT
systems of many of the PSB are not robust enough and do not allow access to
their CBS network to the auditors. ICAI has come out with a detailed advisory
for conducting an audit under these circumstances. However, conducting audits
will not be easy, and there will be challenges in getting records and data and
verifying the same. Auditors will have to adopt different ‘remote’ audit
procedures of accessing and checking data on a virtual platform and at the same
time continuing to comply with the requirements of standards on auditing. It
might seem like auditing remotely is indeed a promising opportunity – but it
comes with its own set of challenges. All this when the role of the auditor is
already under increased scrutiny, and his work is put constantly under the
spotlight by both the public and regulators. Yes, it is true that some of the
frontline listed companies have declared their audited results as per the
schedule, and many of our fellow professionals are also part of this. I am sure
we as Auditors will rise to the occasion and discharge our responsibility and
obligations with flying colours.
I want to end with an appeal to
all our members, who have not renewed their membership and journal subscription
fees, to do so immediately, so that you can continue to benefit from all the
knowledge enhancing activities of your Society.
Take care and stay safe until we
meet again.
Namaste!!
CA Manish Sampat
President
