We cannot (yet) travel in time, so only time can test my predictions of how the CA profession will evolve. However, so many exciting changes are happening(we live in interesting times) that I just had to pen down my thoughts to connect the dots.
The global subprime crisis gave a boost to principles based accounting and auditing standards(IFRS, audit standards) which were nearly universally adopted/adapted from 2008-2013. But if investors thought it would result in lesser fraud incidence, they were sadly mistaken. The IFRS transition and IFRS induced volatility, led to a comedy of errors, misunderstandings and rerating of stocks/sectors. Management subject to tighter performance linked pay, clawback etc(copied from the Western banking sector pay clampdowns) responded by gaming the metrics. And IFRS was an unwitting accomplice. Realizing that they could use aggressive accounting without earning qualified audit reports, management went all out to polish their books. And the auditors still coming to terms with IFRS, auditing standards, new formats laws etc were always one step behind. But investors were not dummies. The savvier ones among them(FIIs, PE funds etc) demanded forensic audit to be mandatorily performed in addition. Companies on their part, realized that investor relations was too important to be entrusted to the CFO/CS, and instead decided to develop their in house teams with business understanding/insight AND with expertise in accounting, marketing and communications. CAs again were picked up for this role, given their integrated understanding.
The global outcry against income disparities, basic necessity deprivation, corporate ‘huge earnings’, Govt spending , corruption and crony capitalism manifested itself in the Arab spring riots(Egypt, Libya, Tunisia..), Lokpal bill struggle in India, Dodd Frank/Obama care in USA. The Indian Govt did not set up a Lokpal but agreed to be enhance the e-governance substantially, and introduce world class measures like self assessment, uniform tax rates, less complexity, tight but fair penalties, deemed resolution in favour of citizen in case of delay etc. This transparency increased the willingness to pay tax, and increased the taxpayer base to 25% of the population. Of course, this was aided by more withholding taxes(TDS/TCS), transaction taxes(STT, GST) and innovative tax base(MAT, dividend tax, reverse charge etc). After plenty of struggles, GST was introduced in 2015, with dual rates
CAs saw the need to collaborate within the profession(alliances, CPE circles, benevolent fund, networking) and with other professions(LLPs). The MCA introduction of LLP was leveraged by ICAI to permit these partnerships. And how they prospered! Engineers, architects and lawyers helped immensely in valuation, due diligence and expert opinions in audits; while company secretaries and management accountants lent their name to compliance services, cost audits and transactional services performed by LLPs. Of course, the jack of all trades(CA) remained the managing partner. Stung by the fact that LLPs of mostly other professionals were grabbing the premier cost audits, ICWAI tried to amend its bill to prevent that, but failed due to opposition from other professionals. Networks of LLPs rose(many of them borne from ICAI networking efforts) and challenged the Big4 in specialist areas like forensic accounting, valuation, merchant banking etc.
The ICAI efforts to increase the quality of entrants in the CA profession worked well. Despite a midway oversupply(May-11 CA Final placements!), the overall consensus in 2020 was that academic toppers entering the field, had done excellently and could challenge their science peers. This reflected in the MBA entrance results where more CAs got into the premier IIMs(instead of having to wait and go abroad/to ISB), as their analytical caliber helped them to crack CAT. Of course, the CA Final exam pattern was made more practical/applied to ensure that bookworms/crammers would not get rewarded for just knowing the contents of a Rs 500 CD ROM! Recognizing that the quality and quantity of CAs was going up, industry recognized this by shifting a good chunk of Tier I and Tier II MBA college placements to the ICAI campus placements.
This would not have been possible without an improved training. Discarding the old system of relying wholly on the employer for training inputs during the 3yr period, ICAI adapted the ICAEW system of learning diaries, to be maintained and uploaded online. Like how peer review/FRRB brought out the best/worst practices for assurance practices, the review of these diaries was a valuable source of course correction for ICAI, to help those students where learning seemed too skewed. And by setting up its own coaching infrastructure(attending those to be counted as articleship!) and centres of excellence, ICAI was able to conduct many more student seminars/conferences/training programs. The communication skills training program was made on par with top MBA programs, and the Information systems course also was so interesting that CAs decided to compete with BTech system auditors!
CAs finally entered the digital age with XBRL, which made data crunching less labour intensive. While some KPOs were not happy(!), software companies embraced the movement to offer 100% automated XBRL solutions, which could then be verified by the CA. Even the source data(ERP system) become standardized with cloud computing based ERP solutions, that allowed even SMEs to enjoy the benefits of ERP without the capex costs and learning costs(project failure etc). These twin developments made it more imperative for CAs to be tech savvy, capable of writing that XBRL coder on the fly if necessary, or to liaison between operational staff and software persons.
The general improvement in personnel, systems, tax compliance mood etc made the Govt/Regulators even more trusting, and sparked off a virtuous cycle. Human interface kept reducing(or replaced by helpdesks instead of that pesky inspector!), with the limited manpower focused on major cases/test cases only instead of picking on the small fry. Of course, the severe penalties for fraud/major mistake ensured that the tax payers/regulated parties themselves preferred the least human errors, for which systems were designed to auto generate the returns from the ERP/other MIS. This led to reduction in Finance Dept size(now one did not need so many people to manually prepare the basic stuff!). Compliance hassles became fewer(thanks to model laws like LLP/new companies Act) as Govt focused on ensuring companies had processes in place, instead of just an accurate output. The CARO question on internal audit sufficiency and appropriateness, expanded to cover a chunk of other key processes like tax.
With all that technology push, finance departments decided to proactively respond to the double dip recession/cost push inflation/high interest rates etc. Management accounting became in vogue again, and companies began to actually read and apply their cost audit reports. ICWAs finally got their due respect and status on par with CMAs abroad, as companies realized that they had ignored their low hanging fruits for decades. The worst hit sectors(banking, insurance, infrastructure) learnt to apply those lessons, and were now on the rescue path.
So finally, the profession(service and practice) saw substantial changes. Those who went with the wind prospered, others were left wondering what happened.
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