Rajya Sabha passes Bill to curb misconduct in chartered accountant, cost accountant institutions

Rajya Sabha passes Bill to curb misconduct in chartered accountant, cost accountant institutions

New Delhi: The Rajya Sabha on Tuesday passed a Bill to provide a mechanism for dealing with cases of misconduct in the three professional institutions — the Institute of Chartered Accountants of India, the Institute of Cost Accountants of India and the Institute of Company Secretaries of India.

The Chartered Accountants, the Cost and Works Accountants, and the Company Secretaries (Amendment) Bill, 2022 was passed with voice vote. 

The Bill, which was passed by the Lok Sabha on March 30, seeks to amend the existing Chartered Accountants Act 1949, the Cost and Works Accountants Act 1959, and the Company Secretaries Act 1980.

The Bill is also aimed at enhancing “accountability and transparency” by providing for an audit of accounts of the three institutes by a firm of chartered accountants to be appointed annually by the Council from the panel of auditors maintained by the Comptroller and Auditor-General of India.

Replying to the debate on the Bill, Union Finance Minister Nirmala Sitharaman, who also holds charge of the Ministry of Corporate Affairs, dispelled the apprehensions expressed by Opposition members and said there is no proposal or intention to infringe upon the autonomy of these three institutions.

Sitharaman said the Bill would bring chartered accountancy, cost accountancy, and company secretary on a single platform.

She said there was no proposal at all to have single legislation for all the three institutes.

There are three separate Acts, and they will be governed by their respective separate Acts, Sitharaman said.

Noting this is just a consolidated amendment Bill, the Minister said: “There are three different Acts, largely their wordings and the spirit of the flow of the Acts are comparable and, therefore, the amendments have been brought in to make sure that there is greater comparability between the functioning of the three institutes. But the amendments are being brought in as one integrated Bill.”

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The Amendment Bill suggests changing the presiding officer to someone who is not a chartered accountant (CA) nominated by the government from out of the panel prepared and provided by the Council itself.

She said the amendments would bring greater transparency and responsibilities of these instructions.

Later, the House negated all the amendments moved by the Opposition members and the Bill was passed by a voice vote.

The Bill increases certain fines under the three Acts. If a partner or owner of a firm is repeatedly found guilty of misconduct during the last five years, disciplinary action can be taken against the firm.

In India, chartered accountants, cost accountants, and company secretaries are regulated according to the provisions of the Chartered Accountants Act 1949, the Cost and Works Accountants Act 1959, and the Company Secretaries Act 1980, respectively. 

The three Acts provide for the setting up of the Institute of Chartered Accountants of India, the Institute of Cost Accountants of India, and the Institute of Company Secretaries of India. 

first published:April 5, 2022, 9:02 p.m.

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