In India’s robust financial system, the CIBIL score has become a household term. Every bank, lender, or financial institution relies on this mechanism to assess the creditworthiness of borrowers before making lending decisions. This transparency saves time, reduces risk, and rewards responsible financial behaviour.
Now, compare this to the ecosystem of Chartered Accountants (CAs), where there is absolutely no such system to identify clients who default on professional fees. A CA might offer months of consulting, audit, or representation before raising an invoice, only to find that the client never intends to pay. Such clients simply jump ship and approach another CA, leaving a trail of unpaid dues behind.
Unfortunately, while ICAI mandates a No Objection Certificate (NOC) before a new auditor is appointed, many CAs overlook this control or clients manage to bypass it. This is a breach of professional respect and ethics, one that weakens the entire fraternity.
🔧 Enter AI and Digital Systems: A New Era for Ethical Enforcement
Imagine if ICAI built a centralized digital platform — powered by Artificial Intelligence (AI), Big Data, and cloud technology — that could track and flag defaulting clients.
Here’s what this system could do:
AI-Powered Client Risk Scoring:
Like CIBIL generates a credit score, this system could analyse payment behaviour, dispute history, frequency of CA switches, and flag high-risk clients. AI algorithms can identify patterns even experienced professionals may miss.
Blockchain-Based Record Keeping:
Secure, tamper-proof digital records maintained via blockchain. Every client engagement, invoice, payment status, and NOC could be safely recorded.
Digital KYC and PAN-Aadhaar Integration:
Clients linked via PAN or Aadhaar ensure identity masking is minimised. Digital KYC would verify onboarding clients with confidence.
Smart Dashboards for CAs:
Real-time portals where CAs can view red flags, outstanding dues, and client ratings before engagement.
Machine Learning-Based Alerts:
Predictive models can issue alerts based on behaviour like frequent CA changes, delayed responses, or past disputes.
Client Review and Appeal System:
Clients wrongly flagged can dispute entries. AI can assist in analysing both sides with transparency and fairness.
📊 Statistical Relevance
Recent professional surveys in India reveal that nearly 30% of independent Chartered Accountants face at least one major client default annually. Among mid-size firms, more than 20% of revenue loss is tied to unpaid consulting fees. Despite these alarming figures, there is no institutional framework to track or penalise fee defaulters — a glaring gap in the professional space.
👥 Growing Numbers, Growing Responsibility – A Double-Edged Sword
India has witnessed a remarkable growth in the number of Chartered Accountants over the last two decades. From a few thousand active practitioners in the 1990s, the country now boasts over 3.8 lakh CAs, with thousands of fresh professionals entering the field each year.
While this reflects the profession’s strength, it also reveals a vulnerability. Fresh CAs, eager to establish themselves, are often the first targets of exploitative clients who receive services and then avoid payments, knowing these newcomers may lack robust follow-up systems. These clients then hop to the next CA, repeating the cycle.
This isn’t a flaw in talent; it’s a loophole being taken advantage of. A digital tracking system would empower both new and experienced CAs, ensuring that professional ethics are honoured across the board.
🌐 Why This Matters More Than Ever
As India’s economy becomes increasingly digitised, the scope of CA services has expanded — from taxation and audit to forensic analysis, virtual CFO roles, and startup consultancy. This diversification brings with it more exposure to non-payment risk.
By integrating AI and digital tools into a centralised, ICAI-governed system, the profession can enforce greater accountability, identify repeat offenders, and ensure that time and effort of every CA is respected.
🏁 Final Word: A Collective Move Forward
This concept isn’t about creating a blacklist. It’s about fostering a culture of trust, respect, and professional fairness. If supported with the right checks, balances, and ethical oversight, a CIBIL-like system for CAs could revolutionise the way client engagements are handled in India.
Let’s build a future where ethical practice is not just preached, but protected — powered by technology, and grounded in respect.
CA Sandeep Ramankutty
