Consider two things. One, the present political dispensation in the country will not allow self-governance of Chartered Accountants (CAs) for long. Today or tomorrow, sort of what happened with the BCCI, upside down reforms will be introduced in how compliance of accounting and auditing standards is managed and enforced.
Two, technological advancement, especially automation and the simplification of processes and rules of direct and indirect taxation, will all combine to lessen dependency of individuals and corporates on accounting and taxation professionals.
In the midst of these possibilities is the news of an upcoming agency, National Financial Reporting Authority (NFRA) that will not only set standards for accounting and auditing but will also oversee and enforce compliance. NFRA already finds a place in the Companies Act 2013; however since its rollout needs a stricter resolve, the agency couldn’t see the light of the day.
But until when? No one could have imagined a complete wipe out of 500 and 1000 currency notes; nor did anyone think of such smooth passage of GST and its wide acceptance. On same lines, NFRA will just not be introduced soon; it will be welcomed and similarly has to be accepted.
It is widely believed today that tax avoidance and evasion was nurtured under the guidance of a h andful of fraudulent tax professionals, because of whom the entire fraternity bears the brunt. And near-impunity of CAs involved in unscrupulous pacts with their clients assured that they had not been brought to books.
It is to be noted as well that the esteemed Institute cannot be blamed of any lapses on its part; still, the best way is to have an independent, unrelated agency for administering compliance.
Another fact that needs acceptance is that this is a time when almost every function is being overhauled. Taxis are being booked from phones, phones being purchased online and online being the new address of all enterprises. With NFRA, the accounting and auditing profession is set to be overhauled in a similar fashion, better say, enriched.
What NFRA will do is it will cleanse the profession, make practicing more ethical and law-bound. This, in turn, will enhance the stature of the fraternity as unlawful activities and doers will finally be wiped out, sooner or later. Another advantage is that ICAI will be freed of its unwanted task of enforcing compliance and booking culprits. Resources saved from all this can be invested in improving facilities for present members and also for re-skilling and training.
NFRA is a blessing. By accepting NFRA with wide open arms, you will only bring a level playing field to the profession, which means ending the practice of cornering of profits by big fishes (mainly a few CA Firms in Tier-1 cities) that habitually employ unethical practices to flout laws and allow misquoting of facts and figures in financial statements. Two, with the focus of ICAI on re-skilling, CAs will be much better placed in this fast changing world.
Also read: Are We Prepared For Financial Year Change?
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