- The Lok Sabha has approved The Chartered Accountants, The Cost and Works Accountants and The Company Secretaries (Amendment) Bill, 2021.
- Bill Aims to overhaul the operations of the Institutes of Chartered Accountants, Cost Accountants, and Company Secretaries.
- Government has emphasized that the revisions will not jeopardise the autonomy of the three Institutes.
- Bill will boost audit quality and the investment climate in the country.
The Lok Sabha has approved The Chartered Accountants, The Cost and Works Accountants and The Company Secretaries (Amendment) Bill, 2021 to overhaul the operations of the Institutes of Chartered Accountants, Cost Accountants, and Company Secretaries.
Bill seeks to amend the Chartered Accountants Act, 1949, the Cost and Works Accountants Act, 1959 and the Company Secretaries Act, 1980 by proposing amendments based on the findings and recommendations of a High-Level Committee which has been earlier constituted by the Ministry of Corporate Affairs (MCA), aiming to revamp the profession.
The Chartered Accountants, Cost and Works Accountants, and Company Secretaries (Amendment) Bill proposes and enables appointment of non-Chartered Accountant (CA), non-cost accountant, and non-company secretary as the presiding officer of the Institutes’ disciplinary committees. Finance and Corporate Affairs Minister Nirmala Sitharaman emphasised that the reforms will not affect the institutes’ authority.
Ms Sitharaman emphasised that the revisions will not jeopardise the autonomy of the three Institutes. Instead, it will boost audit quality and the investment climate in the country. The amendments will make the institutes more accountable and responsible, as well as push them to follow worldwide best practises. Government believes that audit statements should inspire more trust among all stakeholders.
Bill seeks to strengthen the disciplinary mechanism and address conflict of interest between the administrative and disciplinary arms of the Institutes however the design of the Bll will create operational challenges for practical implementation.
Determining the disciplinary cases would necessitate a thorough knowledge of the profession and its practical implementation. During the fact-finding step and subsequent professional judgement, relevant specialists may be better able to comprehend the specific intricacies of the profession.
Given the complexities, it is critical that the Presiding Officer for such proceedings be a person with suitable qualifications and experience in the subject. Various key issues are determined by unanimity, involving the members of the Institute as well as the Government’s candidates. The chairperson remains the member of the Institute.
However, some of the provisions can be revisited in a way that independent members or Government nominees remains part of the Board of Disciplinary Committee but presiding officers remains members of the respective institutes. Qualification needed for being a member of a disciplinary body should be clearly laid down. Qualification must commensurate with the requirements of the responsibilities and role including setting up a defined process for evaluation of competency and expertise.
Staff Galactik Views