Enhanced Role of Chartered Accountants & Finance Professionals to Make the Nation a Powerhouse for Reincarnation

A CA has the role of elaborating capital budgeting, Tax planning, budget forecasting, preparation of books of accounts, financing, and additional actions. They have the role of implementing GST.

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Enhanced Role of Chartered Accountants (CA)& Finance Professionals to Make the Nation a Powerhouse for Reincarnation

One who thinks that Chartered Accountants just evaluate debits and credits is mistaken. CA plays a significant role in the development of the country and this role is indeed crucial for growth.

A CA has the role of elaborating capital budgeting, Tax planning, budget forecasting, preparation of books of accounts, financing, and additional actions. They have the role of implementing GST. The steps will be executed by a team of CAs before initiating GST.

Chartered Accountancy not only deals with debit-credit of the accounts but they play a very important role at a Macro level in nation-building. CAs provide a foundation base of the economy and utilizing the financial expertise, the nation gets right direction in various financial and economy-related measures to enhance the decaying Indian economy and enhance the economy along with industrial growth.CA is helpful in building a nation and here are some roles they play in the economy and finance-related segments of a nation. Find complete details on the roles and responsibilities of a chartered accountant in the Indian economy and how he supports businesses to work at par.

Chartered Accountant contributes in fields of Tax planning, capital budgeting, budget forecasting, financing or any other activity, preparation of books of accounts, and in every field as well. In the current scenario, after GST implementation, the role of Chartered Accountants has become very important. From the drafting rules to provisions to implementation of GST, the role and expertise of CAs were utilized to the fullest.

Some of the practical roles which are played by the Chartered Accountant are here:

  1. Accountability
  2. Social Accounting
  3. Taxation
  4. Capital Formation
  5. Economic Planning
  6. Compliance
  7. Enhance Shareholder Value

It was well said by Dr. APJ Abdul Kalam that Chartered Accountants are partners in nation-building.

CA & Finance Professionals in India

  • 2K+ Members spread throughout the country and in different parts of the world;
  • Chartered Accountants are rendering services in every walk of economic life – Politics, Judiciary, Government, Agriculture, Corporate, NGOs;
  • The profession is made up of all sizes of firms;
  • Increasing trends towards consolidation;
  • The government of India looks at CAs as Partners in Nation Building.

Enhanced Role of Chartered Accountants (CA)& Finance Professionals to Make the Nation a Powerhouse for Reincarnation A Rational person can see the participation of Chartered Accountants in every field. Whether it is related to budget forecasting, Tax planning, preparation of books of accounts, capital budgeting, financing, or any other activity, the need for Chartered Accountants is in every field.

Their expert knowledge is required in every area. As we know that trending topic of the current scenario is the implementation of GST and Chartered Accountants are playing a vital role in its implementation. Starting from drafting rules and provisions for the GST act till the implementation of GST, knowledge of Chartered Accountants is a pre-requisite.

Chartered Accountants play an eminent role in various fields. The knowledgeable advice of Chartered Accountants is pre-requisite information of any law relating to commerce, taxation, or legal fields. While forming a law or any act Chartered Accountants is one of the most important committee members. contributing to it. They have comprehensive knowledge of various important aspects which is the important information of any law.

Chartered Accountant’s role in the taxation field is commendable. They are the masters of taxation. Due to their discernment, they help in tax planning. It is significant to understand the difference between tax evasion and tax planning. Tax evasion is illegal and it attracts penal consequences. On the other hand, tax planning is legal which is beneficial to the common man and to our nation both. Tax planning is the analysis of a financial situation or plan from a tax perspective. For the growth of the country, it is important for a nation that its commercial sector grows. Chartered Accountants provide requisite knowledge to business entities which help in the smooth functioning of the business.

A famous business entrepreneur Ratan Tata has made a statement that “I need MBAs for running my business but Chartered Accountants to teach them how to run the business.” Chartered Accountant’s guidance helps inefficient running of the business. They deal with company law matters, matters relating to taxation, help in preparing and maintaining books of accounts and other documents as per the applicable financial reporting framework.

In an era of globalization, business entities and even the government of our nation try to join hands with foreign companies. When any business entity starts functioning on a global level, many aspects like, complying with laws of the Foreign Exchange Management Act or complying with rules and regulations of governments of every country where business is operating. Conducting business at the international level also involves inflows and outflow of foreign currencies. A Chartered Accountant helps a business entity to deal with all these matters. A Chartered Accountant has expertise in these laws and he/she guides a business in all these matters.

They also help in regulating the foreign currencies by entering swap contracts forward contracts, futures contracts, etc. which in turn helps to regulate foreign exchange inflow and outflow in the country. A nation’s growth is in direct proportion with the growth of its citizens. Investment opportunities are gaining their charm day by day. A rational investor wants to invest in those stock portfolios which have chances of giving a maximum return. All businesses, as well as investors, have to comply with laws relating to the investment fields like rules and regulations of SEBI Act, 1992 and SCRA Act. Government frames various laws and rules in this regard to protect the interest of investors and to maintain the economic growth of the nation. Chartered Accountant plays an incredible role in this field also. They provide the required knowledge to investors as well as companies. They even have a role in framing policies regarding laws of investment. We all know that the e-commerce sector is also growing at an increasing rate. Google tax Equalization Levy, Various provisions of TDS,  attracts the e-commerce industry. A Chartered Accountant helps this sector by providing sufficient guidance and by handling their taxation matters.

The next important area in which Chartered Accountants’ role is important in nation-building is preventing Corruption, malfunctioning, window dressing, detecting frauds in companies, etc. A nation will grow only after the end of corruption. Chartered Accountants help to minimize corruption by following rules and regulations and by creating awareness in people about wrong practices and their penal consequences. In a company, an auditor (Chartered Accountants) is required to express his opinion on the true and fair view of financial statements. An auditor tries to search about wrong practices done by management or staff and it is his duty to express his opinion on it. As per orders of the Comptroller and Auditor General (CAG) of India, Chartered Accountant also expresses his opinion on the financial statements of a government company. Auditor’s opinion increases the trust of investors as well as helps in restricting any malfunction.

A Chartered Accountant is an important pillar in the economic growth of the nation. The View of Chartered Accountants to solve financial problems is different from others due to their knowledge and expertise in the field of finance taxation, stock market, and company law matters, FOREX, etc. It helps even common man or residents of the country in understanding the rules and regulations.

So it is rightly said that Chartered Accountants are partners in nation-building.

Auditors Role

It is important to review the reports and tax compliance for the businesses. For developing the nation a CA will do the audit for the organizations and provides income tax. It is the responsibility of the CA for filing the tax for the country.

The appropriate tax payment will have to be made before the stated timeline is declared by the government. The CA performs all the government audits like Service Tax audits, CAG audits, forensic audits,s and Income Tax audits with utmost care.

Socio-Economic role of auditing in contributing to the protection of public interest

The audit is an instrument, a tool of financial control, which is employed by the public or private sector or an individual to safeguard itself against fraud, extravagance, and more importantly to bring credibility to the audited. According to the International Organization of Supreme Audit Institution’s audit is defined as ‘Evaluation or examination of systems, operations, and activities of a specific entity, to ascertain they are executed or they function within the framework of certain budget, objectives, rules, and requirements. This is a modern definition of audit in the Public sector and does not constrict itself with only cash audit, which was the case originally.

For sound and effective functioning of government and to ascertain that the benefit of public funds being used, reach the lowest strata of society and to every individual, an audit is an indispensable tool. It helps secure accountability of the executive to the parliament and towards the public in general. The legislature can exercise control over the executives and verify that the public resources have been utilized responsibly, for the purpose intended and funds raised through various sources like taxes reach the government fully.

The audit must be treated as an instrument for exercising control over processes, systems, finances, and individuals to make governments and governing bodies more responsible towards the public and its resources, but it cannot be considered as an end unto itself.`

Socio-Economic Role of Audit

Demand-driven discipline refers to the discipline that is developed due to the demand of society. In this sense, an audit is purely a demand-driven discipline. It evolved because society demanded it. As (lint suggested, & the audit function has evolved in response to the perceived need of individuals or groups in society who seek information or reassurance about the conduct or performance of others in which they have an acknowledged and legitimate interest. Again in 1998, he argued that Audit exists because interested individuals or groups are unable for one or more reasons to obtain for themselves the information or reassurance they require. Many other scholars agree with Flint on Audit always being a dynamic rather than a static concept. Auditing thus has evolved to match the changing needs and demands of society. Through this adaptation, constantly contributed to the development of civilization. & the changes in needs and expectations of society are highly influenced by the factors contextual to the economic, political, and sociological environment at a particular point in time. So the development of auditing as a demand-driven discipline is deeply rooted in the evolution of auditing through different time frames and the change in expectations of the society throughout that time.

Auditing is a cornerstone of good public sector governance. 9yproviding unbiased, objective assessments of whether public resources are managed responsibly and effectively to achieve intended results, auditors help public sector organizations achieve accountability and integrity, improve operations, and instill confidence among citizens and stakeholders. The public sector auditors’ role supports the governance responsibilities of oversight, insight, and foresight. Oversight addresses whether public sector entities are doing what they are supposed to do and serves to detect and deter public corruption. Insight assists decision-makers by providing an independent assessment of public sector programs, policies, operations, and results. Foresight identifies trends and emerging challenges. Auditors use tools such as financial audits, performance audits, investigations, and advisory services to fulfill each of these roles. Through these roles, auditors help the public sector operate with greater transparency, probity, and equity. They help reduce risk, improve accountability and maintain public trust.

Accountants have many roles to play in the development of every economy. The growth and development of every economy hinge on how resources are judiciously managed and multiplied. Accounting is all about cost savings and this I am sure is the backbone of economic development and growth. Some of the roles of accountants in economic development are listed below:

Investment appraisal Function: Without investments, the economy will not develop and grow. Investment appraisal is the process of evaluating an investment opportunity in the face of both financial and other non-financial factors in order to determine the worthwhileness of the investment opportunity. Accountants are among the few professionals that can effectively perform this function with minimal resources being expended.

Preparation of Financial Statements: Investors and business owners no longer have to be present in their businesses for it to strive. This is made possible by the entity concept in accounting wish allows a business to be different from its owners. The only way that owners of businesses can monitor what is happening in their business is to have a representation of activities through the financial statements of the company. This financial statement is only prepared by the accountants (though the law says it is the duty of the managers to prepare the financial statements, but they make accountants of the company do it for them). This again gave rise to another role of the accountants; the accounts need to be audited in order for the piece of information to have some credibility. Hence, auditing is another role of accountants in the economic development of the economy.

Cost Savings: There is an old adage that one does not get rich by earning and throwing away. The same goes for economic development. Costs must be minimized for the economy to grow and develop. It is the main role of accountants to lead the park of cost savers. Knowledge acquired from cost and management accounting is the most powerful tool that accountants need to give management the best advice on cost-saving.

Fraud Fighting:

The world economy has lost so much from the activities of fraudsters. If the activities of fraudsters are not put under check, economic development will be stalled as no meaningful economic development will take place in an environment where misappropriations and embezzlement are all we hear in the news on a daily basis. Accountants are trained to be at the front seat in the fight against fraud in our time. This however will not be an easy task as the mix of accounting, law, and IT skills are required for accountants to be well-positioned to effectively fight fraud. Accountants should be happy with the requirements of establishing and implementing functional internal controls in every organization they find themselves in. Accountants also have to embrace IT as many fraudsters now perpetrate their evil deeds through the aid of computers and other information technology infrastructures.

Rendering of Financial Services:

It is a well-known fact that economic development and growth will not be achieved if finances are not well managed. Accountants render financial services to business owners and the community at large. This role of accountants is more important now that the world is trying to recover from the shock of the financial meltdown that just rocked the global economy at large.

Since businesses are the main stimulant of every economy and accounting is the language of businesses, accountants have a major role to play in ensuring that the language of business is understood by all and sundry. Imagine the level of confusion that we all will be experiencing if we remove communication from our day-to-day activities.

Permit me at this point to say that accountants are the most important professionals as far as economic development is concerned. I don’t mean to upset you in any way if you are not an accountant but, that is a simple truth. You can always join the accounting profession.

Tax Revenue Contributors Role

A CA submits the report to the government of the audits and tax complaints on which he works. CA provides the tax revenues to the government which shows nation-building. A CA will be assured that all payable once will file tax. They are working as a wake device. According to the laws, a CA will have to do audits of all the financial statements of the corporate buildings before serving them in front of the general public.

Today Indian taxing system is going a revolutionary change owing to spreading the

wings of Indian business into the global market. Indian Government is paying its full

attention to liberalize the taxing system and at the same time closing the loopholes to disable the intruders to evade the taxing system so as to enlarge the revenue to the government exchequer and flourish the overall business scene. Resent Budget

has also played important role in this direction.

The direct tax is one of the important sources of government revenue. Further, it also impacts directly the disposable income of individuals. If the direct tax rate is increased by the Government, people start saving for investment purposes. Due to this behavior of individual’s income generation process of an economy is hampered. Particularly this is true for luxury commodities. This decreases the production of luxury commodities in the economy and as a result also adversely affects the GDP and standards of living.

However on the positive side, if proper deductions are allowed based on investments, it leads to capital formation in the country. Thus, broadly following are the positive sides of direct taxes on economic growth:

  • Better capital formation;
  • Inducement of saving and investment;
  • Surety of Government’s revenue growth;
  • Increase in the planned expenditure of government;
  • Decrease in inflation rate due to lesser availability of disposable income to persons;
  • Timely availability of revenue to the Government.

Since the burden of Indirect taxes directly falls on the consumers, it directly impacts the cost of goods and services. Thus, indirect tax increases the efficiency of the producers, since to maintain their demand they will have to put their full efforts towards cost-cutting measures. Further, this effort of producers also brings proper utilization of resources in the economy. The consumers are at freedom to select products of their choice, thus healthy competition also grows in the economy. Thus, broadly following are the positive sides of indirect taxes on economic growth:

  • Better utilization of resources;
  • Increase in efficiency of producers;
  • Growth of healthy competition in the market;
  • More freedom of choice to the consumers;
  • Increase in demand for luxury goods;
  • Increase in standard of living of people.

Business Consultant Role

ICAI is responsible to advise the government for several aspects of taxation so that they make the taxation framework of the country stronger. CA also guides the government in developing the nation in concern of business affairs.

Accountants’ role in Nation Building

Accountants can play a key role as torchbearers in nation-building. They can use their financial expertise to suggest various economic and financial measures to uplift the deteriorating economy and boost economic as well as industrial growth.

Enhanced Role of Chartered Accountants (CA)& Finance Professionals to Make the Nation a Powerhouse for Reincarnation Accountants were traditionally known as the masters of debits and credits and used to sit in the back office. The role of an accountant has been continually evolving and moving further away from the stereotypical image of bean counter to a business partner who can provide sound support and advice across the business. On a broader scale accountants can and must go even beyond to contribute towards national and global matters.

Accountants are known for their technical expertise, but as per my view, the two missing attributes which prevent them from discharging their expected duties towards the nation are professionalism and patriotism.

There are few areas where professional accountants can make greater contributions in the nation-building process.

  1. Development of the growth agenda of the country

In the current economic context, accountants can play a key role as torchbearers in nation-building. They can use their financial expertise to suggest various economic and financial measures to uplift the deteriorating economy and boost economic as well as industrial growth.

  1. Maximizing Government revenue

The accounting professionals who are employed and those who function as tax consultants should not resort to tax evasion, but rather engage in providing tax education and ensure the due taxes are paid by the entities and individuals, without forgetting the fact that the non-payment of taxes and tax evasion according to the new Inland Revenue Act is a criminal offense. This is an area where the integrity and professionalism of accountants must come into play.

  1. Climate action

Climate change is an urgent, global, and systemic issue that can threaten the sustainability of organizations, markets, and economies. Professional accountants in their various roles at governance, strategic, and operational levels have a significant contribution to make in helping governments, capital markets, and businesses develop and implement plans for climate change mitigation and adaptation.

Accountants can further leverage their expertise in the field of non-financial information on how companies can make the right changes to reduce their environmental footprint and costs. Helping businesses to report on their performance in an integrated way using the Integrated Reporting Framework will help to measure transformative progress and share experience on issues that are of public interest.

  1. MSME development

The Indian MSME sector is the backbone of the national economic structure and has unremittingly acted as the bulwark for the Indian economy, providing it resilience to ward off global economic shocks and adversities. With around 63.4 million units throughout the geographical expanse of the country, MSMEs contribute around 6.11% of the manufacturing GDP and 24.63% of the GDP from service activities as well as 33.4% of India’s manufacturing output. They have been able to provide employment to around 120 million persons and contribute around 45% of the overall exports from India. The sector has consistently maintained a growth rate of over 10%. About 20% of the MSMEs are based out of rural areas, which indicates the deployment of a significant rural workforce in the MSME sector and is an exhibit of the importance of these enterprises in promoting sustainable and inclusive development as well as generating large scale employment, especially in the rural areas.

Some of the areas where the professional accountants can look into would be, outsourcing lower-level activities (Ex. Bookkeeping), forming strategic alliances with other professionals, becoming a ‘one-stop’ referral center to other service providers. It is also important for the professional accounting bodies to invest in training and empowering the professional accountants who are catering to this segment.

  1. Transform SOEs

State-Owned Enterprises (SOEs) play a significant role in the country’s economy and are present in key sectors including ports, energy, banking, insurance, trading, etc. SOEs are vulnerable to mismanagement and corruption because of potential conflicts between the ownership and policy-making functions of the Government, and undue political influence on their policies, appointments, and business practices.

The internal control, monitoring, and governance frameworks seem inadequate to deal with these problems and most of the entities do not have proper management information reporting mechanisms for better decision making. Further, certain entities do not have proper financials and monitoring mechanisms of the performance.

One of the key areas where lack of integrity is assumed to be at the highest levels in the procurement function. A professional accountant can play a major role in enhancing the governance of these institutions via sound internal controls, improve management information reporting for better decision making and provide expert input to maximize the returns. One of the main behavioral contributions that can be made by the professional accountants employed in these institutions is to keep themselves away from malpractices and undue political favoritism.

  1. Enhance finance literacy

In general, financial literacy means a blend of knowledge, skill, attitude, and behavior required to make sound financial decisions and eventually realize individual financial security. Effects of lower financial literacy are greatly magnified in the rural public and small-medium business community. This phenomenon not only weakens the financial management of the general public but also allows ill-minded financial institutions and intermediaries to exploit them.

Therefore, one of the greatest contributions professional accountants can make to society is to educate the general public on financial and economic concepts and help improve their financial literacy. In my view, this is one of the major weapons we can use to alleviate poverty in the country.

Conclusion

The finance function has a clear opportunity to ensure that it remains a highly relevant, flexible organization that supports business growth at a time when there is an even more pressing need to react quickly. It is all too easy to be dazed by the size of the disruption that organizations face, or the feeling that the new is hard to grasp and ever-changing. Successful organizations in the current environment learn to thrive on change; adapt to shifting environments; to embrace the opportunities offered by technological innovations, the effective use of data being prime amongst these. These organizations focus on integrating finance professionals’ skills and CA’s knowledge throughout the organization as an integral part of the decision-making process.

The future is uncertain and is being shaped by the sharing economy and digital age, influencing government revenue and affecting public debt. Citizens expect more from their governments as well, demanding transparency and better decisions regarding expenditure and taxation. The challenges we face are varied, ranging from a lack of political will to a lack of capacity and capability. Every single person in the accountancy industry has the potential to create impactful change through their individual actions.


By,
Dr. P. Sekhar,
Chairman,
Unleashing India Global Smart City Panel & Micro Tech Global Foundation
Dr. P. Sekhar the policy times

By,
Mr. Guru Sowle,
Reputed Global Indian in the USA,
Financial Services Expert, Corporate Leader Board Member, and an Entrepreneur
Mr. Guru Sowle


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Enhanced Role of Chartered Accountants & Finance Professionals to Make the Nation a Powerhouse for Reincarnation
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A CA has the role of elaborating capital budgeting, Tax planning, budget forecasting, preparation of books of accounts, financing, and additional actions. They have the role of implementing GST.
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THE POLICY TIMES
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