'Looking at using AI to make members future-proof': ICAI President Ranjeet Kumar Agarwal

In the face of new requirements and technology, including the focus on sustainability reporting and the advent of AI, the Institute of Chartered Accountants of India (ICAI) is working on new courses to make chartered accountants future proof. In an interview with Business Today, 47-year-old Ranjeet Kumar Agarwal, President of ICAI, discusses these issues as well as the course of investigation into Byju’s. Edited excerpts:

The ICAI has recently approved the policy document on the Centre of Excellence (CoE) and plans to set up nine such centres in the next three years. Can you elaborate?

The ICAI thinks it is now time to reskill and upskill our members as AI is now the backbone of any knowledge setting by any professional institution.

We believe the knowledge of AI is a required skill set for our members and the CoEs will help to reskill and upskill them through residential training courses. We have 400,000 members, of whom 160,000 are practicing members and the remaining 240,000 are in the industry and in businesses. At present, we have two CoEs in Hyderabad and Jaipur. So first, we will remodel these into model centres where all the research activities, AI labs, and other courses will be conducted. We have also decided to set up nine more CoEs in the next three years.

What are the other areas where you are looking at the use of AI?

We have made a new committee this year—AI in ICAI, as we believe that AI will play a big role in accounting and auditing. We have 900,000 CA students. The entire course material will be put on GPT and students can use it as a free tool to understand any particular topic or to get answers. We are also looking at using AI for our members. At present, there are about 7,000 listed firms. Any member CA, who is certifying a financial statement and comes across any situation on how to report a related-party transaction or non-compliance, can download and refer to the company audit reports of all these 7,000 listed companies. This will enhance the quality of reporting and will prove to be an effective tool.

The finance minister had previously spoken about CAs needing to embrace technology. How is ICAI working on that?

That’s a very futuristic statement. Without technology, a CA student or member cannot survive. ICAI has decided that its 900,000 students and 400,000 members—a total of 1.3 million people, will become tech savvy and will be fully equipped to adopt and use any new technology that comes in. We are in talks with the Ministry of Electronics and Information Technology on how an effective audit tool can be created to help the audit and accounting profession. The discussions are still at an initial stage.

ICAI has also been working on sustainability reporting. Can you elaborate on that?

Yes, sustainability is a big area for us. We had set up the Sustainability Reporting Standards Board before any other country had come up with this initiative. This board has come out with 16 audit standards on 16 thematic areas that will be applicable to all our members.

We have also come out with the Standard on Sustainability Assurance Engagements or SSAE 3000, which deals with assurance engagements on an entity’s sustainability information.

The ICAI has also come out with a certificate course on sustainability reporting and many members are being trained on it. We have also set up a Section 8 company, called The Institute of Social Auditors of India, on the recommendation of Sebi. It will enrol, regulate and develop social auditors who will have to clear an examination conducted by the National Institute of Securities Market. We believe that India has a huge potential to take the leadership role as far as sustainability is concerned.

Additionally, the ICAI is also in advanced talks with CPA Australia and the Institute of Chartered Accountants in England and Wales to collaborate and launch a global certificate course on sustainability.

This course can be done by any global chartered accountant as per their own jurisdictional requirement. We have also made a sustainability reporting maturity model. We have held an initial meeting and hopefully within three to six months, we can collaborate and launch this.

It will be open to CAs across the world and not only to these three countries. It will be customised as per the local jurisdiction of every accounting body.

Can you share any update on the Byju’s investigation? Also you had previously said that the ICAI may take up the Paytm issue?

We are not looking into the Paytm issue. In case of Byju’s, the ICAI’s Financial Reporting Review Board (FRRB) has reviewed the company’s financial statement.

This board has limited power and they can use whatever data is in the public domain to take a decision on the role of the auditor. If there are minor lapses, the FRRB can give them advice; but in case of serious lapses, it can refer it to the disciplinary committee, which has the power to investigate. The disciplinary committee can also ask for additional information.

This process is ongoing in the disciplinary committee. Hopefully by the end of this year, the result will come.

@surabhi_prasad