Tuesday, Aug 09, 2022
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Digital Technology Must Be Used As 'Audit Enabler': CAG

Digital Technology is also misused to perpetrate large-scale frauds, and urged the ICAI to use it as an 'audit enabler', the Comptroller and Auditor General of India (CAG) Girish Chandra Murmu said

The last decade has seen an explosion of digital technologies, technology is fascinating
The last decade has seen an explosion of digital technologies, technology is fascinating

The Comptroller and Auditor General of India (CAG) Girish Chandra Murmu on Friday said the evolution of digital technology over the last decade has been fascinating, however, it is also misused to perpetrate large-scale frauds, and urged the ICAI to use it as an 'audit enabler'.

The CAG was speaking on the 74th Chartered Accountants Day celebrated on July 1.

The last decade was marked by path-breaking and transformational changes in all spheres in the country, reflective of the clear vision and consistent efforts to drive economic growth, encourage investment, enhance ease of doing business and overall development and wellbeing of the people, Murmu said.

The last decade has seen an explosion of digital technologies, technology is fascinating.

"But technology as we have seen can also be a tool that enables large-scale frauds like in the case of fraudulent loan apps and other digital frauds," Murmu said while delivering his address at an event organised by the Institute of Chartered Accountants of India (ICAI).

On the flip side, technology can also be a huge audit enabler whether in auditing through or around the computer.

"ICAI must make more efforts to ensure that digital audit technologies are available to all members and all of us need to stay abreast of these developments," Murumu urged the accounting body.

He said the changes and developments over a period of time has necessitated revisiting and reviewing of the processes and methodologies in auditing.

The mandate of CAG is to promote accountability, transparency and good governance through high quality auditing and provide independent and timely assurance to the legislature and the public that public funds are being collected and used effectively and efficiently, he said.

The CAG is also supposed to provide advice on the forms of accounts to be maintained keeping in view the developments and transformation in institutional structures and functions like advent of joint ventures, PPPs, among others while keeping in view the generally accepted standards and global standards.

Stressing that optimum usage of resources along with maintaining ecological balance is envisaged in the Sustainable Development Goal (SDG), he said natural resources and environmental accounting are emerging areas of interest.

He said CAG has come out with an accounting manual for minerals and energy resources as a maiden effort.

Murmu also drew his attention towards the audit of local bodies as we live in an era of decentralised governance.

One of the critical issues has been the weaknesses in accounting in Panchayati Raj Institutions (PRIs) and Urban Local Bodies (ULBs), he said, asking the chartered accounting professional to be more proactive in this area.

"The increased involvement of professional accountants will go a long way in improving the accounting and oversight mechanism in the local bodies. Another aspect I would like to deal with is for CAs to look beyond the traditional domains of audit.

There is a significant thrust on Micro Small and Medium Enterprises (MSMEs). He said these entities are critical for economic growth as they are the biggest job providers and more importantly for promoting equitable development of the country.

"The government has launched a slew of initiatives to provide access to credit, technology and local as well as global markets for MSMEs. I see a large role that CAs can play in the MSME space. While CAs do provide audit and compliance support, there is a significant opportunity to engage with MSMEs as financial advisors to help them build scalable businesses with robust processes," Murmu said.

He said these enterprises can do much more with more guidance on how best their finances and marketing can be handled and how their business processes can be transformed for value maximisation.

Rajesh Verma, secretary, ministry of corporate affairs, said a chartered accountant is an important pillar in the economic growth of the nation.

"The view of CAs 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," Verma said.

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