A few years back on July 1st, 2017 while addressing a huge mass of CAs and CSs, Our Honorable Prime Minister of India, Mr. Narendra Modi said,
“The signature of a CA is more powerful than the signature of the president of India” he added, “when you (CA) make your signature on an account or document, it is trusted by the government and the common people”.
Now, whether it was said figuratively or literally, the issue for debate is not this. But one thing is clear, the importance of a CA in India is all in all.
To think of a nation like India without CAs even for one day seems terrible as it will create chaos that will take months to be solved. CAs work in adherence to strict financial rules and regulations and keep a sharp eye on the financial and capital happening to the companies. The government would find itself lame without CAs, as there will be no one to take this important responsibility nor can it be given to anyone.
In the absence of CAs, the statutory audits will not take place, and that is where the real importance of CAs and the real chaos come into play.
According to Section 148 of the Companies Act, 2013, a cost audit is required. Section 208 of the Companies Act, 2013, requires a secretarial audit. Section 44AB of the Income Tax Act of 1961 mandates a tax audit.
The GST Audit is required by Section 35(5) of the GST Act of 2017. The goal of an audit is to determine if the information contained in the financial report, as a whole, accurately reflects the organization's financial status at a given date, such as: Are the facts of what the company owns and owes appropriately recorded in the balance sheet? If such information is not being processed in a nation then the nation’s economy will be affected badly.
Finally, the report of The Institute of Chartered Accountants of India (ICAI) is also mandatory for the economic budget of India. CAs possess a vital place in the advisory board of the president of India and prime minister of India for day-to-day dealings and can create an uncomfortable situation if the CAs are not there at the board meetings. The financial loan processing would not take place as during bank audits, the role of CA is very important, and the reading of funds during the loan is affected by the decision of the CA.
CAs play a crucial role in nation-building on a wide scale, in addition to being involved in debit-credit accounts. CA is the backbone of the economy. A CA can help with tax planning, capital planning, budget planning, financing or other activities, and accounting bookkeeping, among other things.
The role of the CA has become increasingly vital in the current situation, especially with the implementation of GST. From the formulation of legislation and regulations through the implementation of GST, the role and experience of accountants are leveraged as much as possible.
If CA will not work for one day, then the audits won’t take place. If these are not conducted on the said time, then it may lead to tax evasion. which is the criminal act of a person or a company attempting to avoid paying their tax obligations.
Tax evasion is a serious infraction that can result in criminal prosecution and harsh fines. Tax evasion brings the government to a low ebb even though it happens once in a blue moon, but in a tumultuous situation where no CA is there to provide a fair report of finance and income to the government, the economy will be shattered badly.
Furthermore, not only does the government suffer, but it also affects the stock markets as well. Investors and stakeholders of a company must know the fair financial accounts and robustness of the company before they invest. Now, without CA, the facts and figures can be disordered, which may not be a fruitful situation for anyone.
It is not a hyperbolic statement to say that the CAs are one of the important pillars of the Indian economy.
Here’s an amazing article titled, Top CA firms to watch out for in 2024 that everyone should read.
FAQs
Chartered Accountants (CAs) are integral to maintaining the financial health of India. They ensure that audits, tax filings, and financial reports are conducted accurately and timely. CAs help prevent tax evasion, provide advisory services to the government, and safeguard economic stability. Without them, India would face financial chaos, impacting everything from government policies to stock market activities.
If CAs were absent for just one day, audits would halt, potentially delaying tax filings and compliance with financial regulations. This could lead to severe consequences like tax evasion, impacting government revenue. Moreover, the stock markets could experience volatility, as investors rely on accurate financial reporting to make informed decisions.
CAs play a crucial role in tax audits, ensuring businesses comply with tax regulations. They help the government in detecting tax evasion and fraud, thus contributing to the country’s financial integrity. Their signature is trusted more than that of high-profile government officials, underlining their significance in financial matters.
The absence of CAs would cause financial misreporting, leading to distorted figures of a company’s financial health. Investors rely on audit reports to make investment decisions. Without CAs, the stock market would face uncertainty, reducing investor confidence and possibly triggering market crashes.
CAs help with strategic financial planning, capital budgeting, and tax management, supporting both businesses and the government. They also play a pivotal role in GST audits and compliance. Their expertise ensures that financial systems are robust, contributing to national economic growth and stability.
