ICAI, CAG working on autonomous audit systems using blockchain, AI
Nagpur, Dec 7, 2025
The Institute of Chartered Accountants of India (ICAI) and office of the Comptroller of Auditor General (CAG) are jointly working on bringing in autonomous audit systems using blockchain technology and artificial intelligence (AI). This would enable tracking each transaction that would serve as a block connecting it to all the stakeholders and even regulators through a seamless mechanism.
ICAI is the professional governing body of chartered accountants formed under an act of Parliament as CAG audits govt bodies. There have been rounds of talks with the CAG, including one meeting last month. The plan is to start with an audit of public sector undertakings (PSUs) in the initial phase, Umesh Sharma, a central council member of ICAI, told TOI. He was in the city to attend the groundbreaking event for ICAI's new building for Nagpur branch. The central council is the governing body of ICAI.
It's the beginning. Both ICAI and CAG have taken up the work considering the importance of autonomous auditing, said Sharma. Under this, the transaction would serve to connect seamlessly not only to the different stakeholders but also to departments like income tax or GST.
Explaining the concept, chartered accountant and former vice-chairman of ICAI regional council Julfesh Shah, said autonomous audit uses AI to perform financial checks beyond simple data entry systems. It is expected to be more accurate compared to manual audits. It can involve AI agents to scrutinise ledgers, identify risks, and create working papers. It can help in the early detection of frauds too, he said.
The veracity of every debit and credit entry in an organisation can be checked as the seamless system will have access to the books of all the related parties at a given time, explained a chartered accountant.
The ICAI, as a part of its pre-Budget memorandum, has written to the ministry of finance to allow the revision of 3B returns under the GST regime. This is a summary of inward and outward transactions of a business entity. The ICAI demanded that the govt should allow the filing of revised returns as there is a scope of inadvertent errors unlike now when the returns cannot be changed.
The ICAI has also pressed for expeditation of the refund of input tax credit (ITC) amounts arising out of the reduction in rates under the new GST regime, said Sharma.
[The Times of India]
