Published: 31st March 2022
What The FAQ: All you need to know about the recent Chartered Accountants (Amendment) Bill
The CA Amendment Bill was passed in Parliament and this directly affects three institutes along with the members and students under it. Here's how
Accusations that the Government of India is interfering with autonomous bodies and their functions, plus trying to take control of independent institutions, have been made again. Only this time, it's about the Indian Chartered Accountants Institute, the Institute of Cost Accountants of India and the Institute of Company Secretaries of India
The CA Amendment Bill, which is a Bill to amend the Chartered Accountants Act 1949, the Cost and Work Accountant Act 1959 and the Companies Secretary Act 1980, was introduced by Rao Inderjit Singh, Minister of State (Corporate Affairs), in the Lok Sabha on Tuesday, March 29, and was passed on Wednesday, March 30. This Bill allows for a revamp of institutes of chartered accountants, cost accountants and company secretaries.
In today's edition of What The FAQ, we explore what this Bill means for the institutes and their students.
Which institutes will be impacted by it and how does this, in turn, impact us?
It impacts the Institute of Chartered Accountants of India (ICAI), the Institute of Cost Accountants of India (earlier known as ICWAI) and the Institute of Company Secretaries of India (ICSI). Under the ICAI alone, there are 3.5 lakh members and about 7.5 lakh students. You do the math.
So, what does the Bill propose to do?
All the three aforementioned institutes have disciplinary committees with a presiding officer each. Now, what the Chartered Accountants, Cost and Works Accountants and Company Secretaries (Amendment) Bill wants to do is appoint those who are not Chartered Accountants (CA) nor cost accountants and non-company secretaries as presiding officers for the respective institutions. The Bill also provides for setting up of coordination committees, which will be headed by the Secretary of the Ministry of Corporate Affairs and have representation from the institutes. It provides for the registration of firms with the institutes, which will help Indian accountancy firms grow, as per the Finance Minister. Also, for those partners and firms who are found guilty of misconduct, the quantum of fines will be enhanced, proposes the Bill.
What does this mean for the ICAI?
Earlier, the ICAI's disciplinary committee had two members from the central council of ICAI, who were also Charted Accountants (CAs), and two others were nominated by the government. The committee is presided by the elected president of the ICAI who is also a CA. But post the amendment, at the helm of the committee will be a government nominee, a bureaucrat. The allegation is that the move takes away the autonomy of the ICAI and that, at the helm of affairs, there needs to be a CA, not a bureaucrat.
What are the reassurances provided by the government?
Finance and Corporate Affairs Minister Nirmala Sitharaman has stated that the Bill does not intend to infringe upon the autonomy of any of the three institutes. Instead, she mentioned that it will enhance the audit quality and will help improve the investment climate of the country. It will make the institutes accountable, responsible and will encourage them to adopt best global practices, the minister said.
What is the opposition saying?
Apart from alleging that the Centre intends to take over independent institutions, the opposition had several remarks to make. Congress leader Adhir Ranjan Chowdhury said that the councils already have committees in place and it was unclear why there was a need for setting up another coordination committee. DMK leader A Raja, asked, "For Bar Council, the chairman is a lawyer. For Medical Council, chairman is a doctor, but for ICAI committee, chairman will be a non-CA?... In case of institutions, domain knowledge is important."
It is to be noted that first, the Bill was introduced in December last year and then sent to a Standing Committee for more deliberation. TMC’s Saugata Roy, who was a part of the Standing Committee, said, "The Standing Committee had mentioned some things on the autonomy, which the Bill has not followed. The bureaucrats of the MCA have increased their stranglehold on the three professions. You have thrown the baby with the bathwater in the name of regulations. The disciplinary committee has more non-CAs than CAs."