July2018
ConceptPaperon
Embracing
RoboticProcessAutomation
OpportunitiesandChallengesforAccountancyProfession
Digital Accounting and Assurance Board
(Set up by an Act of Parliament)
EMBRACING ROBOTIC PROCESS AUTOMATION
Contents
Introduction 1
Foreword 3
Preface 4
Era of Automation 5
What is Robotic Process Automation (RPA) 7
Key Objectives of Implementing RPA 8
Triggers for Use of RPA 9
Target Areas for RPA 10
Critical Success Factors of RPA 11
How does RPA Work 13
Robotic Tools and Vendor Landscape 15
RPA Methodology 16
Governance in RPA 18
Accounting and Auditing of Robotic Process Automation 19
RPA Future - Towards Intelligent Automation 19
Case Studies 20
Way Forward for Professional Accountancy Organizations (PAO) 23
References 24
THE INSTITUTE OF CHARTERED ACCOUNTANTS OF INDIA
Introduction
The Institute of Chartered Accountants of India
The Institute of Chartered Accountants of India (ICAI) is a statutory body established by an Act of
Parliament, viz. The Chartered Accountants Act, 1949 (Act No.XXXVIII of 1949) for regulating the
profession of Chartered Accountancy in the country. ICAI is the one amongst accountancy bodies in the
world, with a strong tradition of service to the Indian economy in public interest.
Over a period of time, ICAI has achieved recognition as a premier accounting body not only in the country
but also globally, for maintaining highest standards in technical, ethical areas and for sustaining stringent
examination and education standards. Since 1949, the Chartered Accountancy profession in India has
grown leaps and bounds in terms of:
Y Members and student base
Y Regulate the profession of Accountancy
Y Education and Examination of Chartered Accountancy Course
Y Continuing Professional Education of Members
Y Conducting Post Qualification Courses
Y Formulation of Accounting Standards
Y Prescription of Standard Auditing Procedures
Y Laying down of Ethical Standards
Y Monitoring Quality through Peer Review
Y Ensuring Standards of performance of Members
Y Exercise Disciplinary Jurisdiction
Y Financial Reporting Review
Y Input on Policy matters to Government
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EMBRACING ROBOTIC PROCESS AUTOMATION
Digital Accounting and Assurance Board of ICAI
ICAI has constituted "Digital Accounting and Assurance Board" (DAAB) for fostering a cohesive global strategy
on aspects related to digital accounting and assurance, through sharing of knowledge and practices amongst the
members. DAAB is endeavouring to identify, deliberate and highlight on issues in accounting (including valuation)
and assurance (including internal audit) issues in the digital world.
DAAB is focusing on issues in accounting and assurance arising from the high pace of digitisation, including use of
artificial intelligence in audit, big data analytics in audit, relevance of sampling, valuation of data as an asset,
impairment testing of digital assets, insurance of data - valuation and premium fixation, etc. The Board is taking
up initiatives to develop knowledge base through position papers and articles on issues relating to impact of
technology on accounting and assurance.
Initiatives to position the profession for opportunities in digital era are -
Y Conducting Scalable, Employable and Updated Post Qualification Course on Information System Audit
(DISA)
Y World Class Training to Members on Forensic Accounting and Fraud Detection (FAFD)
Y Imparting Hands on Training through Forensic Labs
Y Evolving firms into thriving digital practice by providing leading technology solutions
Y Research on Emerging Technologies - Artificial Intelligence, Cloud Computing and Robotics
Y Executive Development Program on "Blockchain Technology Driver of Digital Era"
Y Capacity building in digital ecosystem of stakeholders including banks, PSUs
Y Mentoring of Technology Driven Startups by Chartered Accountants
Y Team of Innovators for helping members navigate digital path
Y Digital Competency Maturity Model for upgrading firms in digital landscape
Y Research Paper on "Early Signals on Fraud in Banking Sector"
Y Incubation Centre for Blockchain Technology
Y Webinars on strategies and approach to adopt technology in assurance services
Y Research on embedding the understanding and use of technology in accounting and assurance services
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THE INSTITUTE OF CHARTERED ACCOUNTANTS OF INDIA
Foreword
Organisations world over are challenged by ever changing economic conditions, technological developments, or
consumer preferences, thereby forcing organizations to adopt smart automation solutions. Technological
revolution in the form of Robotic Process Automation (RPA) is underway, and it offers huge potential to use
technology for reassigning resources and improving data quality and process efficiency.
Keeping pace with dynamic digital landscape, Digital Accounting and Assurance Board (DAAB) of the Institute
of Chartered Accountants of India (ICAI) has released "Concept Paper on Embracing Robotic Process
Automation Opportunities and Challenges for Accountancy Profession". This document briefly provides an
overview of Robotic Process Automation and focuses on role of chartered accountants in adoption of this evolving
technology by organisations.
I compliment CA. Atul Kumar Gupta, Chairman, DAAB, CA. Manu Agrawal, Vice-Chairman, DAAB, and
other members of the Board for this excellent and timely publication. I am sure that this paper will be useful source
of information and the members will benefit by understanding this nascent technology and re-skilling their
competencies.
CA. Naveen N. D. Gupta New Delhi
President, ICAI 30th June, 2018
Technological change is occurring at a rapid pace and a host of trends such as, artificial intelligence, machine
learning, automation and robotics will accelerate developments even further. Accountancy profession will attain
newer heights only when it adapts and embraces these new technologies. The profession has not only to learn from
emerging technologies, but also understand its deeper implications; to imbibe/use it in their work as a professional.
In this context, Digital Accounting and Assurance Board of ICAI has issued this "Concept Paper on Embracing
Robotic Process Automation Opportunities and Challenges for Accountancy Profession". This is an extremely
relevant document as it is perceived that all routine, repetitive, rule-based tasks will soon be performed by software
BOTS and human resources can be deployed to higher value activities. Our members should proactively
understand opportunities provided by Robotic Process Automation and deliver value added services efficiently.
I am sure that the members will find this document useful in adopting this evolving technology.
CA. Prafulla P. Chhajed New Delhi
Vice-President, ICAI 30th June, 2018
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EMBRACING ROBOTIC PROCESS AUTOMATION
Preface
Advances in new technologies offer an exciting opportunity to re-imagine the future of accountancy profession.
Chartered accountants should be key players in driving adoption of these technologies, and in leading the
transformation that ensues from technology innovation. Digital Accounting and Assurance board (DAAB) has
been proactive in taking up initiatives to upgrade competencies of the members in digital era and evolving firms
into thriving digital practice by providing technology driven solutions.
DAAB has released "Concept Paper on Embracing Robotic Process Automation - Opportunities and Challenges for Accountancy
Profession" which gives a brief on current adoption of RPA as a technology and its impact on chartered
accountancy profession. This document highlights key objectives of RPA, Triggers for Use of RPA, Target Areas
for RPA, Critical Success Factors for RPA, Robotic tools and vendor landscape, RPA Future Towards Intelligent
Automation, etc. Case studies also have been included on accounting function, tax function, management
reporting and analysis, etc.
At this juncture, we wish to place on record our sincere thanks to CA. Yukti Arora, Convenor of the Group, CA.
Nikhil Gupta, and CA. Rahul Gupta for taking time out of their pressing preoccupations and contributing in
preparation of draft of this important publication of the Board.
We would like to express our gratitude to CA. Naveen N.D. Gupta, President ICAI and, CA. Prafulla Premsukh
Chhajed, Vice President, ICAI for their thought leadership and encouragement to the initiatives of the Board. We
also wish to place on record our gratitude for all the Board members, co-opted members and special invitees for
providing their invaluable guidance and support to various initiatives of the Board. I also wish to express my
sincere appreciation for CA. Jyoti Singh, Secretary, DAAB, for her inputs in finalizing this Concept Paper.
We are sure that the members and other interested readers would find this Concept paper beneficial in exploring
use of RPA as a technology for their professional work.
CA. Atul Kumar Gupta CA. Manu Agrawal
Chairman, DAAB Vice-Chairman,DAAB
New Delhi
30th June, 2018
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THE INSTITUTE OF CHARTERED ACCOUNTANTS OF INDIA
Era of Automation
As referred by World Economic Forum, we are at the cusp of "Fourth Industrial Revolution," and central to which
is the development and adoption of automated technologies. Automation enabled by advanced technologies like,
machine learning, artificial intelligence, robotic process automation present an enticing solution to many
challenges faced by business and organizations.
Time to impact industries' business models
Impact felt already 2015-17 2018-20
Rising geopolitical volatility New Energy supplies and Robotics, autonomous
technologies transport
Mobile internet and cloud
technology The Internet of Things Artificial Intelligence
Processing power, Big Data Advanced manufacturing and Adv. materials, biotechnology
3D printing
Sharing economy, crowdsourcing
Longevity and ageing societies
Middle class in emerging markets
New consumer ethics, privacy
Young demographics in emerging issues
markets
Women's economic power,
Rapid urbanization aspirations
Changing nature of work, flexible
work
Climate change, natural
resources
Source: Future of Jobs Report, World Economic Forum
Asia pacific region is slowly emerging on adoption of RPA currently specifically in off-shore development centers
and business process outsourcing (BPO) contracts. North America is currently the largest RPA market, followed by
the United Kingdom. As far as industry, leaders in RPA adoption are in Banking and Financial Services Industry,
followed by telecom, media, and health care.
Gartner predicts that organizations employing more than 10,000 people will see a significant shift towards RPA by
2020 with slowly evolution to include more types of functionality, such as AI software.
Forrester predicts that despite rapid growth, to sustain longevity, RPA will have to incorporate
Artificial Intelligence to understand process goals and be able to handle more decisions. RPA has potential to reach
a market of $2.9 billion by 2021 by moving towards Cognition.
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EMBRACING ROBOTIC PROCESS AUTOMATION
Evolution of Automation
Automation continuum range from enabling strategies that improve parts of business processes to sophisticated
technologies with cognitive elements.
Time
Robotic Process Intelligent Artificial
Automation Automation Intelligence
+ Screen scraping data collection + Data input and output in any + Natural language recognition
+ Rules based business process format and processing
management + Pattern recognition within + Dealing with unstructured
+ Tactical toolset to automate unstructured data super data sets
repetitive tasks + Replication of judgment based + Hypothesis based predictive
+ Cheaper and faster step tasks analysis
towards process efficiency + Basic learning capabilities for + Self-learning rules
continuous improvement to continuously rewritten to
quality and speed improve performance
As the appetite for automation grows, the interplay of emerging technologies will lead to
fundamental changes in how businesses operate and deliver services to customers
Source: Gartner Hype Sycle for Emerging Technologies
Note: Trends across time are not to scale
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THE INSTITUTE OF CHARTERED ACCOUNTANTS OF INDIA
What is
Robotic Process Automation (RPA)
Robotic Process Automation "RPA" is a software programme, which using recorders and easy programming
language imitates human execution of applications, usually for repetitive tasks. Business users control user-friendly
configurations and govern it. RPA repeats human interactions with proven technology. It performs common tasks
such as queries, cut/paste, merging, button clicks, etc. One of the popular definition of "Robotic Process
Automation" is -
"An application of technology that allows employees in a company to configure computer
software, or a 'robot', to capture and interpret existing applications for processing a transaction,
manipulating data, triggering responses and communicating with other digital systems".
- The Institute for Robotic Process Automation (IRPA)
Robotic Process Automation is not a physical robot sitting at a desk performing tasks. It is a new alternative to
improve productivity, unlocking higher Return on Investment than ERP implementations and Software as a
Service (SaaS) which requires more investment in terms of time and cost.
It is the first step and necessary foundation in the enterprise digital operation journey, before implementing
cognitive, chatbots and artificial intelligence.
What is RPA
RPA is... RPA is not...
option noitpo
Computer-coded software Walking, talking auto-bots
Programs that replace humans Physically existing
performing repetitive rules-based tasks machines processing paper
Cross-functional and Artificial intelligence or voice
cross-application macros recognition and reply software
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EMBRACING ROBOTIC PROCESS AUTOMATION
Key Objectives of Implementing RPA
Key objectives of implementing Robotic Process Automation are as follows -
Y Improve customer experience
Y Improve accuracy
Y Manage controls
Y Higher efficiency
Y Reduction of monotonous work
Y Cost saving
Y Skill upgradation of personnel
Robotic Process Automation (RPA) is the next phase of innovation in the world. It's significant potential to become
a differentiator has become evident. Most of the notable players are either assessing possibilities to benefit from
this new solution or even proceeding with the first implementations.
Once IT and security risks are satisfied with the IT architecture, the process is documented in detail and can be
carried forward for implementation.
Key sectors where RPA is playing a significant role in bringing in process efficiencies include highly
regulated verticals such as, healthcare, banking, financial services and insurance. Other major sectors include
telecommunications, utilities, mining, travel and retail.
Functional Areas where RPA implementation is beneficial are as under:
Human Resources
Y Payroll Administration
Y Benefits Enrolment
Y Data of Employees Management
Y Management of Claims
Y Tracking of Leave Applications
Y Routine Query Management
Finance & Accounting
Y Accounts Receivable (OTC)
Y Procurement/ Sourcing
Y Order Management
Y Invoice Processing
Y Billing Management
Y Records to Report (RTR)
Customer Services
Y Billing Support
Y Query Management
Y Compliance Management
Y Order Processing
Y Sales Management
Y Subscription Management
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THE INSTITUTE OF CHARTERED ACCOUNTANTS OF INDIA
Triggers for Use of RPA
RPA implementation burdens costs and timelines, which are relatively insignificant, compared to Big IT platform
updates. It is likely that RPA will quite quickly convert from a Standard Practice to Robotics Process delivering a
competitive advantage that are essential for growth and survival.
Key considerations for a successful RPA implementation
All of these components need to come together seamlessly fo a successful RPA implementation
Accurately measure benefits & proactively manage change Build the right "process portfolio"
Design "fail safe" bots that can intelligently
handle exceptions Develop accurate and comprehensive business case model
Select the right RPA tool(s) and adopt
Develop a scalable & flexible staffing model
appropriate methods & standards
Develop a robust Bot and Program Governance Model Define ambitious and differentiated process outcomes
that allows `fail fast options'
Develop an efficient and effective "HumBot" Adopt holistic and lean process design &
organization model agile implementation approach
RPA drives efficiency benefits, along with improvements in quality, scalability, and resiliency in a cost-effective way.
Efficiency and quality
Y Human errors are eliminated. It enhances compliances/ auditability and results in higher staff satisfaction.
Y Capacity increase by robotics virtual workforce and organisations can refocus on staff for better services.
Productivity boost
Y Average handling time is reduced.
Y Monitoring is performed around the clock.
Y It results in development of new competencies.
Cost saver
Y Processing costs may be reduced by up to 80% in most of the cases.
Y High Potential ROI, if successfully implemented.
Y Short payback in up to one year, provided target area to be automated are judicially identified and
implemented.
Scalability and expertise
Y Quick implementation of new processes based on proper due diligence.
Y Re-usable process elements over a period of time.
Y Build expertise with refocus on the relevant areas.
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EMBRACING ROBOTIC PROCESS AUTOMATION
Target Areas for RPA
Following could be the areas for RPA implementation, which when targeted will result in higher and better return
on investment -
Processes requiring High Volume Transactions
Candidates for robotic automation need not necessarily be limited to high-value transactional processes. Any
process that is labour intensive, high throughput time or high-cost impact errors is a good candidate. For e.g., cash
receipts and payments in banking sector, passbook update, etc.
Items Prone to Errors or Re-work
Manual activities in the process today result in a substantial number of errors due to human operator mistakes. For
e.g., cash reconciliation in treasury management, inter branch reconciliation, full and final settlement for
employees, etc.
High predictability
The process which can be defined as a rule and do not require much of judgement. For e.g., processing of regular
payments, stock management, etc.
Limited exception handling
Simpler processes with little exceptions in delivery are excellent candidates for robotic automation in the
beginning. When learning, the organisation can expand to processes which are complex or error prone. For e.g.,
attendance and payroll management, invoice reconciliation under GST regime, account ledgers balance and tax
reconciliation, etc.
Significant manual work involved
Processes with little automation support today and large chunks of manual work involved benefit more from
Robotics, although the process does not need to be completely 'straight through processed'. For e.g., MIS reporting,
legal and external reporting, maintaining general ledger balance, etc.
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THE INSTITUTE OF CHARTERED ACCOUNTANTS OF INDIA
Critical Success Factors of RPA
There are five key aspects vital to a successful RPA implementation -
i. Process Prioritization
There should be proper framework for process assessment. The criteria for setting process prioritization may
be part of the developed framework. Process owners must be involved in the process assessments for
prioritization to secure their early buy-in and build the business case. Processes critical to the business may be
identified, it should be completely understood to cover the flow towards recipient processes or interaction
among processes (process chain).
ii. Business and IT Accountability
Business process owners must feel accountable for the involvement and commitment of their people to be
deployed in both development and implementation stages of the RPA project. In organizing the project, there
should be clear definition of business and IT roles across during the process prioritization, deployment,
planning and execution. Accordingly, the IT governance protocols must be followed.
iii. Design and Execution
Resources allocated to the RPA project should be dedicated for focused involvement. People intimate to the
process being automated should provide the critical participation not just in the functional design, but in the
User Acceptance Testing and go-live support as well. Exception handling should be anticipated such that
design and testing of such exceptions are comprehensive, and providing no surprises thereafter.
iv. Stakeholder Engagement
Board, Chief Operating Officers, Chief Financial Officers and Chief Information Officers are vital
stakeholders. Strategic Business Unit process owners and day-to-day process operators are mainly the directly-
impacted stakeholders of an RPA project. It is important that the value and potentials of RPA at all levels are
effectively communicated. RPA potentials should be articulated in the context of a broader agenda of benefits
and not just confined to benefits where the process resides. Effective change management tools which facilitate
adaptation, should be deployed. It results in stakeholder's commitments for the project and high sense of
ownership which safeguards success.
v. Benefits Realization
As RPA implementation proceeds, clear regular updates on benefits being sought and progress against each
should be provided. Continuous improvement mechanisms should be well-thought to be in place. These are
the ways of gaining continued confidence of all stakeholders.
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Successful RPA implementation demands achieving a delicate balance
between speed of implementation and risk management
Achieving the optimal balance in your RPA journey
Speed of Controls and Risk
Implementation Management
Select the right set of processes to begin the RPA journey; Have a `portfolio' and `sprint' approach to achieve
EMBRACING ROBOTIC PROCESS AUTOMATION
Process optimal balance between `speed of implementation' and `risk management'
Select the right tool to help you achieve your short, medium and long term objectives; Balancing automation
RPA Tool
12
with control and achieving the right balance between `ease of use' and `robust security' is the key
Implementation Thorough design (e.g., robust Process Design Document) increases implementation velocity and `bot' throughput;
Approach Designing the right `pilot' upfront helps in identifying and assimilating key learnings in the implementation roadmap
Methods & Common standards are needed in order to ensure controlled and consistent implementation of RPA; Leveraging right
Standards methods, tools and skillsets (e.g., `Bot Developers', `Solution Architects') reduces risk and accelerates implementation
Answering key governance related questions (e.g., central vs. local, who owns bots, charge for bot usage) upfront is
Governance critical; Redesigning roles to align with new process and robust change management is critical for successful rollout
THE INSTITUTE OF CHARTERED ACCOUNTANTS OF INDIA
How does RPA Work
As industrial robots transformed the factory floor, RPA bots can transform support functions and back offices.
RPA Bots replicate employee actions like, opening files, inputting data, copy pasting fields in an automated way. To
set up an RPA bot, it may not be necessary to know complex programming because solutions available in market
are user friendly. RPA can be easily being managed from a central controller to enable interaction with variety of
business applications. There are 4 ways to setup RPA bots.
Setting up Instructions
The developer gives detailed instructions to robots to perform and interact with Robot Controller Library.
Robot Controller
It is a core RPA Software which can be used to give jobs to the robots and monitor their activities with respect to
performance of their jobs.
Robots
It can be machine or desktop or virtual system where it interacts directly with the Robot Controller and Business
Applications.
Business Users
Business users of the organisation review the work of the robots and resolves any exception and escalates, if
required, to identify stakeholder for resolution.
In a long run, the bots can be self-learning to go the level of RPA for decision making. RPA is believed to
revolutionize and redefine the way we will work and make us more smart and quick in processes, RPA as we see
have commenced deployment in most large business and, will continue to grow and will adopt to be cognitive by
next five years. Further, it is predicted by many that that is shall develop to machine learning platform probably by
year 2025-2026.
Capabilities of RPA
RPA bots can use the operating system applications like a human user. Bots are capable of copying most user
actions:
Launching and using various applications including
Y Opening emails and attachments
Y Logging into applications
Y Moving files and folders
Integrating with enterprise tools by
Y Connecting to system APIs
Y Reading and writing to databases
Augmenting your data by
Y Scraping data from the web including social media
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EMBRACING ROBOTIC PROCESS AUTOMATION
Data processing
Y Following logical rules such as "if/then" rules
Y Making calculations
Y Extracting data from documents
Y Inputting data to forms
Y Extracting and reformatting data into reports or dashboards
Y Merging data from multiple source
Y Copying and pasting data.
How does RPA work?
1. Process Developers 2. Robot Controller 4. Business Users
3. Robot
5. Applications
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THE INSTITUTE OF CHARTERED ACCOUNTANTS OF INDIA
Robotic Tools and Vendor Landscape
RPA works on user interface level and is able to automate rules-based work without compromising the underlying
IT infrastructure and are capable of interacting with a wide range of applications.
There are wide varieties of vendors providing robotic process automation solution in market, important is that
an organisation should select vendor carefully based on following factors:
Y Clearly laying down the business requirements. e.g., geographic scope, vendor preferences;
Y Evaluate characteristics of vendors to best suit the objectives e.g., integration capability, level of developer
support;
Y Review vendor for specialized solutions showcasing industry and functional expertise;
Y Determine appropriate delivery model and pricing structure considering resource availability and support
model;
Based on the above major factors, an organisation can choose vendor best suited. Some other important factors
which can be considered are:
Y Flexibility and costs with licensing model of vendor tool
Y Vendor support for training, service desk support and implementation
Y Architecture structure of systems, interconnections and dependencies
Y Functionality capabilities related to level of support for RPA functions
Y Development effort
Y Management, auditing and logging capability
Y Effort for robot management, scheduling, event triggers and priorities.
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EMBRACING ROBOTIC PROCESS AUTOMATION
RPA Methodology
RPA Methodology can be divided into following four steps:
Step 1 - Plan and Identify
Y Define scope, stakeholders, and roadmap, key activities including business goals
Y Define processes in scope
Y Identify key stakeholders
Y Begin vendor assessment
Y Define deployment roadmap
Key outputs at this stage are -
Y Catalogue of RPA target processes
Y Defined project team
Y Project roadmap
Step 2 - Analyse and Decide
Y Evaluate applicability and impact of RPA and define implementation approach
Y Analyse, redesign and document target processes and tasks
Y Select vendor technology and begin partnering
Y Develop business case.
Key outputs at this stage are -
Y Vendor selection
Y RPA business case
Y Deployment approach
Step 3 - Execute and Automate
This stage includes execution of operational improvement and robotics deployment
Y Configure, test, and deploy robotics software
Y Train staff to leverage the capability
Y Define exceptions handling
Y Conduct go-live
Key outputs at this stage are -
Y Configured robotics software
Y Training material
Y Command management
Step 4 - Maintain and Sustain
Y Determine ongoing support model embedding continuous improvement
Y Set up governance structures and Centre of Excellence (COE)
Y Perform Key Performance Indicators (KPI) tracking
Y Establish approach to continuous improvement
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THE INSTITUTE OF CHARTERED ACCOUNTANTS OF INDIA
Key outputs at this stage are -
Y Set up governance structures and COE
Y Perform KPI tracking
Y Establish approach to continuous improvement.
Agile approach to run an RPA pilot
Pre-kickoff
Select an appropriate Identify process Manage technical
product vendor candidates requirements
This process need not be as Here the focus is on finding We need to understand how
detailed as what we would suitable, representative the RPA software will be
adopt in selecting a product processes. This process too deployed and what
for a large-scale rollout is a lot more deliberate once preparations may be
we decide to rollout RPA required on part of the Client
across the organization
Post-kickoff
Understand Model current Test process
current process process models
Review each process activity Use RPA tool to model the Test automated process
in detail understanding current process and validate against use cases to confirm
workflows, business rules, model with current process that process model
process variants, owners to ensure accuracy accurately mimics current
dependencies, etc. and completeness human process
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EMBRACING ROBOTIC PROCESS AUTOMATION
Governance in RPA
Like any other change process, biggest driver for success of RPA will depend on governance mechanism for same.
Important factors include -
Y Commitment from Board of Directors;
Y Executive leadership involvement to make the change successful;
Y Well defined policy and procedure;
Y Establishment of Centre of Excellence;
Y Roles and responsibility of RPA implementation and sustainability;
Y KPI for measurement which should be regularly measured, and necessary corrective action should be
taken, wherever required.
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THE INSTITUTE OF CHARTERED ACCOUNTANTS OF INDIA
Accounting and Auditing of RPA
RPA can be used for recording financial transactions which are routine in nature, parking and posting entries,
performing reconciliation, getting confirmation, creating master, provision entries, etc. Auditing of Robotic
Process Automation requires auditor to -
Y Understand the governance process of RPA;
Y Reviewing of process of identification of need, areas to be automated, KPI for automation and process of RPA
tool implementation;
Y Review of system change management control, i.e., how changes were identified, approved, tested, signoff of
testing was given, pre and post migration review and approvals;
Y Analysing robotic controller to see how instructions are scheduled in RPA tool, and monitoring of the same;
Y Reviewing of system blueprint and exception handling process;
Y Reviewing process of exception handling log;
Y Analyse periodic update and monitoring mechanism implemented by client for monitoring of BOTS.
Y Audit access control implemented in RPA, that is who can approve access to RPA administrator, who has access
to administer BOT, who have access to manage exception, Re-run or make changes in RPA tool, etc.
Y Review of RPA transaction logs.
Y Perform testing of edit, validation check, error check, etc., configured in RPA and re-perform few calculation
and transaction reviews to ensure that results are consistent.
RPA Future -
Towards Intelligent Automation
RPA solutions are gradually moving from Mimics Human Actions, i.e., from usage of rules-based processes which
enablefaster processing time, process higher volumes and reduces error to cognitive intelligence, which Mimic
Human Judgement. Herein, it is used for judgement-based processes, using machine language learning capability
and to interpret human behaviour.
They are moving to augment human cognition and can be used for predictive decision making.
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EMBRACING ROBOTIC PROCESS AUTOMATION
Case Studies
RPA has been used by several large organizations and finance functions. Following are some of the case studies -
1. Accounting Close
In a large organization, typically,financial closure requires rules-based processes, it is conducted across multiple
locations often requiring multiple handoffs that involves predominantly manual closure processes, lots of
emails and spread sheet-based communications and calculations and the process lacks end-to-end process
visibility.
In above case, RPA can be leveraged to automate the process by -
Y Automation of loading data into spreadsheets and tracking entity submissions;
Y Update close tasks list;
Y Period-end account reconciliations including, cash and ledger to spreadsheet;
Y Gather and calculate sub-leger and non-financial information.
The above can reduce cycle time for sub-ledger and close activities, automate workflow, centralize operations to
gain efficiencies and reduce operating costs with labour cost reduction. It can also improve consistency and quality
of financial data.
2. Robotics in Tax Function
All manual, repeatable, and time-consuming processes can be automated using RPA. In fact it is predicted that
RPA will be the future of Tax Function. In cases where IT has already implemented Tax Function through
technology solutions, then RPA can enhance its direct and indirect tax compliance and reporting.
RPA can execute activities related to the following direct or indirect tax function -
i. Examples of RPA corporate tax return-related tasks:
Y Auto reconciliation of inter-company transactions
Y Review accounts to ensure consistency with the prior year and note changes
Y Analyse account changes and evaluate potential tax impact
Y Populate tax returns with financial data
Y Automated import of financial tax workbook into tax return forms (using tax return software)
Y Complete non-financial tax return line items and information fields
Y Execute work-flow processes for tax returns and initiate electronic estimated payments
Y Gather and analyse high volumes of state apportionment data (from payroll, fixed assets, and financial
systems)
Y Auto-calculate and posting of current tax accounting
Y Submit tax returns and related payments.
ii. Examples of RPA indirect tax return-related tasks -
Y Interact with bolt-on indirect tax solutions and financial systems to complete high volumes of tax
returns
Y Execute work-flow processes for tax returns and initiate electronic payments
Y Gather transactional details and supporting invoices to analyse potential tax impact
Y Export Industry-specific data for monitoring, evaluation and analysis
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THE INSTITUTE OF CHARTERED ACCOUNTANTS OF INDIA
Robotic Process enhancements can help the organisations to -
Y Accelerate timing of the tax provision by reducing manual effort by up to 20%-35%
Y Efficiently acquire and analyse financial data, creating legal entity accrual adjustments
Y Significant impact on accuracy due to increased visibility into accounts
Y Reduce the staff time operations used to perform low-value work (data extraction and manipulation).
3. Invoice Reconciliation
In large multinational companies, manual invoice reconciliation creates revenue leakage issues since client invoices
and orders are, generally, paper documents (pdfs) and in multiple languages. Reconciliation between paper
documents is highly manual / intensive and is prone to error, contracts and invoices were in pdf form and
documents range up to 200 pages.
RPA can be used to leverage Natural Language Processing (NLP), thereby it can schedule invoices through natural
language processing. Further, it can load and identify functional information from fee schedules of contracts and
invoices.
Simultaneously, it normalizes data from multiple input formats and develops rules to extract functional
information. This way it can translate requirements into an automated, executable business process workflow and
execute analysis
4. Management Reporting and Analytics
RPA can also be used to -
Y Streamline data preparation and sourcing for management reporting;
Y Deploy cognitive automation to improve the analytics;
Y Leverage use of Natural Language Generation (NLG) to produce narratives;
Y Articulate insights from the automation output.
By performing the above processes, the organization could perform better management reporting as it assists in
preparing data from GL and data warehouse for management reports, helps in loading data into excel reports
and/ or standard reporting suites for better analysis on decision making. This results in generating reports with
analysis.
The above enables more informed corrective actions and reduces efforts, which would result in more meaningful
and contextualized analysis.
For instance, RPA can process the following MIS Reports:
Y Cash Flow Projection
Y Credit Report
Y Budget Vs Actual
Y Profitability Statement
Y Management Estimates
It can extract the information from the ERP for actual performance and compare it with the spreadsheet
projections available with the management. This would provide analysis for insight to decision making.
5. Time and Expense Process Streamlining
Time and Expense Process issues include situations where client spends a significant amount of manual effort and
hours reviewing expense reports and supporting receipts for validity and accuracy. Existing process was prone to
errors and in some cases expenses without receipts were being approved due to volumes. Expenditure policy was
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EMBRACING ROBOTIC PROCESS AUTOMATION
loosely followed, and expense reports was challenged on a limit basis, due to the workload of reviews and light
staffing levels.
We can leverage RPA to automate data extraction, data validation, and summary report output with a step-by-step
audit trail. In this case, RPA application was used to automate
Y Process of reading expense reports and receipts,
Y Validation of key fields
Y Providing a summarized report.
OCR technology was also leveraged in conjunction with RPA to read receipts and provide a structured format for
comparison. The program stores all inputs and reports in a central location enabling audit trail.
This improved efficiency and accuracy as well as audit compliance by identifying non-compliance on a daily basis,
and also saves reimbursement for non-policy expenses.
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THE INSTITUTE OF CHARTERED ACCOUNTANTS OF INDIA
Way Forward for
Professional Accountancy Organizations (PAO)
Robotic Process Automation "RPA" is emerging technology and service area for professional accountancy
organisation "PAO". With the increase in implementation of BOT and focus of organisation on automation, the
auditor will be required to audit financial and controls generated from BOT. PAO need to enhance the skillset of
the professional accountants for this emerging technology.
RPA can provide an opportunity to professional accountants to automate their process and deliver client services
in an efficient, error-free and faster way. PAO can deploy RPA for tax filing, GST compliance and reconciliation,
reminder mailers, MIS reporting, even they can deliver managed services for a client using this technology.
Robotic Process Automation (RPA) is not replacing accountants but evolving their role and augmenting their
effectiveness through automation. It is a progressive, positive, and necessary shift that is creating the digital
workspace for accounting and finance professionals to focus on the greatest value they can provide to their
organisation.
Automation tools may lead to a reduction in headcount. But robo-accountants are not actual accountants. Despite
the enormous power and promise of digital solutions, there will always be a need for the human connection.
They're simply machines making routine work easier and more efficient.
ICAEW's document "The Future of the Profession" states that new ways of doing business, shaped by technology
and shifting regulatory environments, mean accountants in business and practice are facing tough challenges and
exciting opportunities. Further, it mentions skills required of accountants in the future are tech-savvy thinkers,
strong communicators, flexible thinkers, strategic thinkers & good networkers.
Professional accountants will also be required to operate and manage BOT for efficient delivery of accounting,
taxation and finance work. Besides, rendering services on automation, ERP implementation and analytics,
professional accountants may enhance their service offering to RPA. To conclude, RPA has huge potential and
PAOs have to provide required training to upskill accountants; which will bring the new changed efficient way of
delivering value-added services efficiently.
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EMBRACING ROBOTIC PROCESS AUTOMATION
References
Y Robotic Process Automation - Driving the Next Wave of Cost Rationalisation ( Minefields, September 2017)
Y Global Challenge Insight Report - "The Future of Jobs - Employment, Skills and Workforce Strategy for the
Fourth Industrial Revolution" (World Economic Forum, January 2016)
Y Gartner Hype Cycle for Emerging Technologies.
Y The Future of the Profession (ICAEW, 2017).
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Composition of Digital Accounting
and Assurance Board 2018-19
Council Members Co-opted Members
CA. Arun Kumar Khowala
Chairman CA. Arun Kumar Agarwal
CA. Atul Kumar Gupta CA. Ashish Dua
CA. Kamal Sachdeva
Vice-Chairman CA. Pancham Ram Maurya
CA. Manu Agrawal CA Sanjay Dashrath Patel
CA. Naveen N. D. Gupta, President (Ex-officio)
CA. Prafulla Premsukh Chhajed, Vice-President (Ex-officio)
CA. M. P. Vijay Kumar Special Invitees
CA. Sanjay Vasudeva Shri TVVPS Chakravarti T
CA. Debashis Mitra Ms. Indumati Srinvasan
CA. Dhinal Ashvinbhai Shah Prof. Neerav Nagar
CA. Anil S. Bhandari Shri Jagannathan Chakravarthi
CA. Prakash Sharma CA. Parveen Kumar
CA. Mangesh Pandurang Kinare
CA. Dhiraj Kumar Khandelwal Secretary, DAAB
CA. Babu Abraham Kallivayalil CA. Jyoti Singh
CA. Jay Chhaira
CA. Nandkishore Chidambar Hegde
CA. K. Sripriya
CA. Mukesh Singh Kushwah
CA. Sanjiv Kumar Chaudhary
CA. Ranjeet Kumar Agarwal
CA. V. Kurian
CA. Sudhansu Pandey
Digital Accounting and Assurance Board
(Set up by an Act of Parliament)
www.icai.org
'ICAI BHAWAN', Post Box Number 7100,
Indraprastha Marg, NEW DELHI - 110 002 India
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