Digital technology should be used as an “audit enabler”: CAG

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Comptroller and Auditor General of India (CAG) Girish Chandra Murmu said on Friday that the evolution of digital technology over the past decade has been fascinating, but it is also being misused to perpetrate fraud on a large scale, and urged ICAI to use it as an “audit facilitator”.

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

The last decade has been marked by revolutionary and transformational changes in all spheres of the country, reflecting a clear vision and constant efforts to stimulate economic growth, encourage investment, improve the ease of doing business and the overall development and the welfare 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 fraud, such as in the case of fraudulent loan applications and other digital frauds,” Murmu said during his remarks. at an event organized by the Institute of Chartered Accountants of India. (ICAI).

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

“ICAI needs to do more to ensure that digital audit technologies are available to all members and we all need to stay abreast of these developments,” Murumu urged the accountancy body.

He said changes and developments over a period of time have necessitated reviewing and revising audit processes and methodologies.

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

The CAG is also expected to provide advice on the forms of accounts to take into account the evolution and transformation of institutional structures and functions such as the advent of joint ventures, PPPs, among others, while keeping in mind mind generally accepted standards and global standards.

Noting that optimal use of resources as well as maintaining ecological balance are envisioned in the Sustainable Development Goal (SDGs), he said natural resource and environmental accounting are emerging areas of interest.

He said the CAG had published an accounting manual for mineral and energy resources as part of a first effort.

Murmu also drew his attention to the auditing of local bodies as we live in an age of decentralized governance.

One of the critical issues has been accounting weaknesses in Panchayati Raj Institutions (PRI) and Urban Local Bodies (ULB), he said, asking the Chartered Professional Accountant to be more proactive in this area. .

“The increased involvement of accounting professionals will go a long way to improving the accounting and control mechanism in local bodies. Another aspect I want to touch on is that CAs are looking beyond the traditional areas of auditing.

There is a significant push on micro small and medium enterprises (MSMEs). He said that these entities are essential for economic growth as they are the biggest providers of jobs and, more importantly, for the promotion of an equitable development of the country.

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

He said these companies can do much more with more guidance on how best to manage their finances and marketing and how their business processes can be transformed to maximize value.

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

“CAs’ vision for solving financial problems is different from others because of their knowledge and expertise in finance, tax, stock market and corporate law,” Verma said.

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