India continues to witness a spike in new cases of Covid-19 and mounting casualties. The number of active cases is close to 30,000 patients as of date. The silver lining in India’s casualty number, however, is our low fatality rate of 3.3%, which is almost as low as South Korea and China. Our nation continues to battle bravely to cope with and against the spread of this pandemic. I take this opportunity to salute the real heroes, warriors who are fighting this war for us, all the sanitation workers, medical staff, health workers, police and other officials continue to put their own life at risk for the safety of others.
Social distancing and lockdown is the best option available to control the spread of the virus. Lockdown hurts the economy but saving lives is more important at this stage. But the lives of millions of migrant workers and daily wage earners also depends upon their livelihood, and they can survive this lockdown only if the Government can provide for their basic sustenance.
We have entered the third phase of the lockdown, and by the time this message reaches you, the country would have gone through more than 40 days of lockdown. These lockdowns have brought most of the economic activities, investments, exports, discretionary consumption and spending to a standstill. Only essential goods and services and public services are allowed to operate, resulting in a substantial economic loss to the country. Our economic growth had already slowed down before the outbreak of this pandemic and now we are faced with this unprecedented problem. Hopefully, soon there will be some relaxations and opening up of normal activity in a phased manner over time. According to World Bank, Indian economy is expected to grow 1.5 per cent to 2.8 per cent (and even that sounds optimistic) in the financial year 2020-2021, which will be the slowest growth rate recorded since the economic reforms of 1991. It is not whether we get knocked down; it’s more important whether we get up. Our future is in our hands, and I am confident that we will emerge stronger after this crisis and will be well on our way to recovery much before the advent of the monsoon.
We at the BCAS, have also converted this challenge into an opportunity and have immediately moved into action to stay connected with our members. We have organised various online events, lectures, courses and panel discussions. I am happy to inform you that during this phase on the lockdown, we have successfully held more than 30 online events reaching out to approximately 20,000 viewers resulting in almost 40,000 person-hours of training. The videos of all these events are available for viewing on our youtube channel, free of cost. In these challenging times, we are committed to our members and would also like to thank all our members and online viewers for their continuous love and support. It is also heartening to know that we added more than 1,500 new social media followers, and now we have close to 37,000 social media followers in all. I would request all of you to stay updated and connected with BCAS on our social media platforms of LinkedIn, YouTube, Twitter and Facebook at bcasglobal.
Another challenge to our profession this year will be the conduct of bank branch audits of public sector banks (PSB). April has been the month where many of our fellow professionals have been busy with these bank audits. This year, due to the lockdown executing these audits has not been possible. There were representations made by the Indian Banks’ association to RBI to restrict with the number of bank branch under audit and relaxation in the audit coverage to 60% of bank’s portfolio in the current year; however, ICAI made representation on this matter, on the grounds of scope limitation to do an audit objectively, detrimental to public faith and against the law of the land and the auditing principles. On 27th april 2020, RBI has communicated to all PSB and relaxed the guidelines for bank branches to be audited for FY 2019-2020. The revised guidelines continue to cover the 90% of all funded and non-funded exposure of the bank and all branches with advances of Rs. 20 crores and above to be compulsorily audited but has relaxed the requirement of compulsory auditing 1/5th of the remaining branches. This, in my view, will leave a considerable number of branches out of the audit scope and may adversely affect our fellow professionals. The unfortunate reality is that Bank branch audit fees form a significant portion of fees for the profession.
Another challenge this year will also be to conduct the audit remotely without visiting the branches. The IT systems of many of the PSB are not robust enough and do not allow access to their CBS network to the auditors. ICAI has come out with a detailed advisory for conducting an audit under these circumstances. However, conducting audits will not be easy, and there will be challenges in getting records and data and verifying the same. Auditors will have to adopt different ‘remote’ audit procedures of accessing and checking data on a virtual platform and at the same time continuing to comply with the requirements of standards on auditing. It might seem like auditing remotely is indeed a promising opportunity – but it comes with its own set of challenges. All this when the role of the auditor is already under increased scrutiny, and his work is put constantly under the spotlight by both the public and regulators. Yes, it is true that some of the frontline listed companies have declared their audited results as per the schedule, and many of our fellow professionals are also part of this. I am sure we as auditors will rise to the occasion and discharge our responsibility and obligations with flying colours.
I want to end with an appeal to all our members, who have not renewed their membership and journal subscription fees, to do so immediately, so that you can continue to benefit from all the knowledge enhancing activities of your Society.
Take care and stay safe until we meet again.
CA. Manish Sampat