Tag: AI new CA syllabus

Can AI Replace Chartered Accountants in the Future?

Summary: The recent CA Final results have prompted discussions about the future of Chartered Accountants (CAs) in the face of advancing AI and machine learning technologies. While AI is expected to enhance audit quality and increase transaction scrutiny, it poses a potential threat to process-driven aspects of the profession. Experts emphasize the importance of human decision-making and emotional intelligence in business, highlighting the irreplaceable value of a CA’s signature and the unique cognitive skills required in auditing. Despite the potential impact of technology on compliance roles, there are opportunities for the profession to elevate its role and provide enhanced services. The collaboration between ICAI and IIM-Ahmedabad aims to equip CAs with the necessary skills to adapt to the evolving landscape.

Can AI replace CA?

Hello connections!
Hope you’re all doing well.

As we all know, ICAI has recently rolled out the CA Final results and we have many newly Qualified Chartered Accountants. My heartfelt Congratulations to all of you there. Cheers to your success, and welcome to the next big chapter of your life. So, I feel this is the most appropriate time to put this thing out here.
We all have been hearing “Ek baar CA ban jao, fir toh life set hai” but here comes the most daunting question for all the Chartered Accountants (CAs) – “Can we be replaced in the future?”

In today’s dynamic and challenging world, the answer to this question cannot be undecorated.

CAs play a vital role in the finance and accounting industry. We are responsible for ensuring the financial integrity of organisations, auditing financial statements, filing corporate tax returns, and providing financial advising.

However in today’s zestful world, the expectations from CAs are increasing, and the traditional methods of accounting and finance are becoming outdated. In this context, machine learning (ML) and artificial intelligence (AI) are playing a significant role in helping CAs meet these challenges.

Artificial Intelligence will help us deliver high quality audits as well as increase the number of transactions being looked at. At the same time, we also need to upskill to counter the threat of automation replacing the process-driven parts of their jobs.

“If there is a good AI system, then there is so much one can look at in terms of transactions. AI will report back to you in terms of any deviations, red flags… and will play a huge role in assisting Chartered Accountants to deliver high quality audit”, said the ICAI President Aniket Sunil Talati.

David Haveron, an expert in A.I. with PwC’s emerging technology practice in Dubai,
explained that there is “an immense opportunity” at a global and at a regional level, to start understanding how A.I. is going to be used in businesses to help us make better decisions.

There are many good reasons for a business to adopt the technology, such as staying competitive in a market, innovating with new products, or driving internal efficiencies in a company.

Sabbir Ahmed, Member Council at the Institute of Chartered Accountants Bangladesh, said human decision making and relationships remain important for business, even when tools like A.I. augment their ability to gain insights.
“Machines cannot drive change – they will give you the prediction but it’s the human being that will drive the change,” he said. “One area where A.I. needs to match with is EI: emotional intelligence. Human beings cannot be replaced by machines. That human element and human empathy is core to trust,” he said.

Let us take an example of Projection Reports.
Any AI can make a good project report for a term loan. Rather, AI can make an amazing detailed feasibility report as well.

However, banks do not accept project reports, unless they are attested by CAs. That is how valuable a signature of the CA is.

Another distinguishing quality of a CA is-

Application of mind and experience during an audit : It is not easy for AI to conduct audits ( not vouching) as it requires opinions and not just mere calculation checks. Also it requires experience to understand which entry is fake and which one is bona-fide. This is another thing, which any AI cannot do.

CEO of The Institute of Chartered Accountants of England and Wales, Michael Izza, said that the accountancy profession has a lot to think about. “There is no doubt that technology will have a significant impact on process-orientated, or compliance-orientated roles, where technology will be able to do it better, more accurately and more quickly. At the same time it offers huge opportunities for the profession to move up the value chain, and to play a role as data guardians in a world where we are drowning in data and starving in insight.”

As the world becomes more complex and dynamic, we as CAs need to embrace these technologies to stay ahead of the curve and provide the best possible service to their clients.

ICAI has now put icing on the cake by collaborating with IIM-Ahmedabad to prepare a vision document. A Memorandum of Understanding (MoU) has been signed between the ICAI and IIM-A to establish mutual co-operation between both institutes for offering and co-hosting open enrollment and customised training programmes exclusively for CAs.

Chartered accountants may soon have to file tax returns for robots

More work for chartered accountants as they soon may have to file more tax returns as robots are likely to be taxed in the future. Pinakin Desai, a practising chartered accountant, mentioned at the Reimagine Summit organized by the Bombay Chartered Accountants’ Society that within two years, there could be a law requiring robots to file tax returns.

During the summit, Advocate Nishith Desai, founder of Nishith Desai & Co., discussed whether robots should be considered a separate entity just like humans, and even citizenship is being offered to robots in some countries.

He further added that robots in India will also be taxed, which would result in more work for chartered accountants. However, the industry is uncertain about whether CAs would be excused if an artificial intelligence tool is used to file tax returns and errors are introduced in the tax return. Currently, due diligence must be thorough when submitting tax returns, as there is no escape from tax litigation in case technological tools introduce errors.

The provisions of Section 273B of the Income Tax Act, 1961, state that penalty should not be imposed in certain cases, but this only applies if sufficient due diligence has been done,” explains Nishit Desai. However, tax professionals are facing the dilemma of whether AI-based evidence will be presented during tax litigations and whether legal courts will only rely on past cases to make their decisions.

This is especially challenging since the Income Tax Department now uses data collected from various sources, including banks, mutual funds, customs, property registrars, social media, and satellite imagery. For instance, during a tax dispute over agricultural income, the Income Tax Department used satellite images of the taxpayer’s barren land from the last five years to question how agricultural income was earned from that land, as Pinakin Desai pointed out.

Apart from satellite imagery, the Income Tax Department also uses technological tools for its pre-filled returns. However, if errors are made while using government-based software, taxpayers can still be protected, according to Shariq Contractor, a partner at CNK & Associates. Nevertheless, it is essential to be cautious and double-check the returns, whether the software is government-based or private software used by a chartered accountant.

Another aspect of AI and technology-led development is the need to safeguard against legal disputes. Auditors should carefully analyze insurance contracts to protect themselves from legal battles that may arise due to the use of AI or unintended technological mistakes.

For example, a US lawyer lost his bar license for quoting a non-existent judgment. The lawyer had used AI-based tools during research, which provided results of cases that were never filed in court. Professional indemnity insurance cover for Chartered Accountancy firms should provide extensive protection against litigations related to AI and different jurisdictions,” suggests Nishit Desai.

CA syllabus and technology; AI, Blockchain in new syllabus

The Institute of Chartered Accountancy of India (ICAI) is likely to launch the new chartered accountancy curriculum for CA Foundation , CA Intermediate and Ca Final levels in July this year.

Addressing a press conference, president of ICAI, Aniket Talati said that the curriculum pending Centre’s approval will be launched in July, which also marks the 75th anniversary of the institute. The curriculum was developed to ensure that CA students can become “global professionals”.

The curriculum, Talati said, has been realigned with the National Education Policy 2020 that will include multidisciplinary education and credit accumulation and transfer based on mutual recognition agreements (MCRA) with educational institutions. A student will be able to appear for one or two papers to get credits and qualification.

“The new curriculum will have subjects like Indian constitution, philosophy, and psychology which is in line with the NEP 2020. We are going to test students on multidisciplinary aspects because we do not want it to be rote learning rather a strong practical application based learning. The credit transfer will be enabled through MCRAs with which a student will be able to appear for one or two papers to get credits and qualification,”

The ICAI has also introduced self-paced online modules, where working students can learn and qualify at their own pace. There are more than 7.5 lakh CA students currently registered with the ICAI.

CA syllabus and technology

Technology has also become a focus in the CA curriculum. Elaborating on the integration of technology with curriculum Talati said: “The institute has started training registered members on disruptive technologies like artificial intelligence, blockchain and data science. It will also find a crucial space in our new curriculum. Now technology will be part of all the papers.”

Talati further emphasised that the proposed curriculum emphasises more on skill-based learning, so that commerce graduates are armed with the right skills.

ICAI is also planning to launch a “New Scheme for Education and Training”, focussing on the development of higher-order skills of application, analysis and interpretation. A special feature of the new scheme would be the mandatory multi-disciplinary case study at the final level, which would help students integrate professional knowledge in different subject areas, analyse and apply such knowledge in problem-solving.

With regards to the Proposed Scheme of Education and Training, vice-president, Ranjeet Agarwal shared “Expert Groups were constituted for the formulation of syllabi and their suggestions were considered by the Board constituted by ICAI Council. On approval of the syllabi, it was submitted to MCA for approval.”

ICAI collaboration with IITs, IIMs

Moving beyond chartered accountancy, the ICAI has now forged ties with 111 higher educational institutions. In January, the institute conducted the first National Education Summit for Commerce and Accountancy (NESCA) to collaborate with universities. ICAI partnered with the National Council of Educational Research and Training (NCERT), and the National Council for Teacher Education (NCTE) for the summit.

“ICAI is globally known for its courses in commerce and chartered accountancy. We have realised that accounting as a subject should not be limited to chartered accountants but should be made available to schools and colleges. We invited educators, deans, heads of universities and colleges to collaborate with us. We have created an exemplar for what kind of subjects should be taught in commerce. We have signed an agreement with 111 universities,” said Talati.

Among the 111 higher education institutions, the institute has signed agreements with seven Indian Institutes of Management (IIM) and two Indian Institutes of Technology (IIT) which recognise the CA qualification for admission in the PhD programme. The ICAI further plans to extend courses related to commerce and CA to be introduced in school education.

“Moving forward we will extend this in the Class 11 and 12 school curriculum. In accounting, taxation and other commerce related subjects are under consideration. We have sent the new course curriculum for approval before the ministry and once it is approved more students will take interest in chartered accountancy,” Talati elaborated.

CA Articleship

The ICAI has also brought down the articleship period from existing three years to two years. CA Articleship is a practical training program mandatory to be a chartered accountant after completion of an academic degree.

“We thought why not have a two year articleship period where there are no requirements for communication skills courses or IIT courses and the student does not appear for the final examination during those two years. After completion of articleship, students will have ample time to prepare for the final examination which can be taken only after six months,” Talati explained.

According to the proposed plan, there will be only 12 days of leaves in a year for a CA aspirant. Currently ICAI grants 156 days of leave during the three-year CA articleship period subject to a maximum leave of 180 days.

CA Students: Northeast, Jammu and Kashmir

To widen its reach, ICAI had announced a 75 percent concession in registration course fee for all levels of CA courses to the students registering from Union Territories of Jammu and Kashmir, Ladakh and eight North-East states, namely, Arunachal Pradesh, Assam, Manipur, Meghalaya, Mizoram, Nagaland, Sikkim, Tripura and Andaman and Nicobar Islands till March 31, 2025.

“We are seeing good growth in northeastern and students in Leh-Ladakh region because of the concession we are giving. We have also started career counselling as well for students in Leh Ladakh and North Eastern states in India. We have observed that the penetration of chartered accountancy has been very less. The concession in fee and the career counselling initiative has got us good traction for the course,” said Talati.