Chartered accountants’ apex body ICAI has submitted a memorandum to a Parliamentary panel, raising concerns about certain provisions in the proposed bill to amend the law governing chartered accountants in the country.
The Institute of Chartered Accountants of India (ICAI) has submitted its views on the provisions, including the one pertaining to the constitution of disciplinary committee, to BJP member Jayant Sinha-led Parliamentary Standing Committee on Finance, which is looking into the bill.
On December 21, the Lok Sabha referred the Chartered Accountants, the Cost and Works Accountants and the Company Secretaries (Amendment) Bill, 2021, to the panel for scrutiny.
The bill seeks to amend the laws governing chartered accountants, cost accountants and company secretaries.
"We have already submitted our memorandum to the Parliamentary Standing Committee on Finance. They are going to hear us on February 3,” ICAI President Nihar N Jambusaria told PTI on Thursday.
He said there are three major issues, including about the disciplinary committee and approval of names of CA firms registered with the ICAI. Another issue is regarding the proposed coordination committee between the institutes of chartered accountants, cost accountants and company secretaries.
Under the current law, the disciplinary committee has two government nominees and three members from the ICAI council. The bill has proposed to include two CAs (Chartered Accountants) and three non-CAs.
Besides, it has been proposed that the disciplinary committee will be headed by a non-CA.
"We are asking that the current status be maintained and they are proposing that even the presiding officer should be non-CA... we are saying that if a non-CA becomes the presiding officer, the person will not understand the nitty-gritty of accounting standards, auditing standards, ethical standards and it would be difficult for him to make a judgement in any case," Jambusaria said.
Currently, ICAI President or Vice President is the presiding officer of the disciplinary committee.
"There are two government nominees and at present, we take unanimous decisions... if they want three non-CAs, then at least the presiding officer should be a CA," he stressed.
Among other provisions, the bill has proposed that CA firms can be brought under the disciplinary mechanism and the ICAI does not have an objection to it.
However, Jambusaria said it has also been proposed that the ICAI should approve the name of a firm, which is not similar to an existing CA firm in India or abroad.
"We are seeking an amendment since nobody has a database of CA firms in foreign countries. It would not be possible for the ICAI to find out whether the name proposed by any new firm is similar to the name of a firm existing in any other country, other than India," he pointed out.
With respect to the proposal to set up the coordination committee among the institutes, the ICAI President said the committee's terms of reference should be confined to only coordination.
"They have covered some more areas and we are asking them to drop (them) as, after all, the three institutes are autonomous bodies...," he added.
Finance and Corporate Affairs Minister Nirmala Sitharaman had introduced the Chartered Accountants, the Cost and Works Accountants and the Company Secretaries (Amendment) Bill, 2021 in the Lok Sabha on December 17.
Later, the bill was referred to the Parliamentary panel, which is expected to submit its report during the Budget Session. The first part of the session will start on January 31 and conclude on February 11, while the second part will commence on March 14 and end on April 8.