Lok Sabha on Wednesday approved a bill to revamp the functioning of the Institute of Chartered Accountants of India (ICAI), Institute of Cost Accountants of India and Institute of Company Secretaries of India, with Union minister Nirmala Sitharaman asserting that the changes will not impact the autonomy of these bodies.
The Chartered Accountants, Cost and Works Accountants and Company Secretaries (Amendment) Bill seeks to appoint non-Chartered Accountant (CA), non-cost accountant and non-company secretary as the presiding officer of the disciplinary committees of the respective institutes.
Piloting the bill, Finance and Corporate Affairs Minister Nirmala Sitharaman said the amendments will not infringe upon the autonomy of the three institutes. Instead, it will enhance the quality of audit and improve the country’s investment climate, she added.
The amendments, she said, “will make the institutes more responsible and accountable” and encourage them to adopt global best practices. All stakeholders should have greater confidence of audit statements”.
The bill, which amends the Chartered Accountants Act, 1949, the Cost and Works Accountants Act, 1959, and the Company Secretaries Act, 1980, was later passed by the Lower House after rejecting the amendments moved by the opposition members.
Among other things, the bill provides for setting up of a coordination committee headed by the Secretary of the Ministry of Corporate Affairs. It will have representations from the three institutes.
The minister said that earlier, the three institutes had signed an MoU to set up a coordination committee but the proposal could not take off.
The committee would help in managing the resources of the institutes, she said, adding that IIMs and IITs too have coordination committees.
The bill also provides for registration of firms with the institutes and it will help in paving the way for Indian accountancy firms to grow big, she said.
It also proposes to enhance the quantum of fines for partners and firms found guilty of misconduct.
Responding to criticism that the amendments would dilute the autonomy of the institutes, the FM said, “There is no proposal or intention to impinge upon the autonomy of the three institutes. They will continue to perform their functions.”
Participating in the debate, Congress leader Adhir Ranjan Chowdhury said that while the minister referred to the US, UK, South Africa in her reply, the bill failed to abide by their best practices.
“Through this bill, the government is making a subtle and deliberate attempt to consolidate power and to snatch away the independence of institutions by dismantling the autonomous framework of the concerned institutions,” he said
NCP leader Supriya Sule said that her main concern was about the autonomy of the three reputed institutes.
“You gave the examples of IITs and IIMs. But these institutes are funded by the government while these professional institutes are not. How can they be compared? Doesn’t this take away the autonomy of these institutions?,” she asked.
RSP’s N K Premachandran also raised the issue of autonomy of these institutions.
Author Comments: This step of regularizing the disciplinary procedures for members of these institutes is a slap on the face of these institutes and raises a question mark on the integrity and honesty of these hard working professionals. This step is outrageous and is an attempt to subjugate the autonomy of these reputed institutes which have been the torch-bearers of true and fair financial reporting in the country. Mistakes do happen sometimes since these members are human after all, however, more often than not, the mistakes made by these institutes and their members are nothing compared to the “Human Errors” made by the people in sitting in power trying to monitor them, when those who are trying to monitor these institutes have been involved in “Making Mistakes” themselves. It is to be seen what the long term implications will be. Lets hope that status quo is maintained in this matter and no action is taken which may infringe upon the powers of these esteemed institutes.