ICAI Expresses Concerns Regarding CA Act Amendment Bill to Parliamentary Panel

The Chartered Accountants’ Apex Body, the Institute of Chartered Accountants of India (ICAI), has filed a memorandum to a Parliamentary panel, expressing reservations about some elements in the proposed bill to change the law governing chartered accountants in India.

The Institute of Chartered Accountants of India (ICAI) has given its comments on the sections of the bill, particularly the one regarding the formation of a disciplinary committee, to the Parliamentary Standing Committee on Finance, which is being investigated by BJP member Jayant Sinha.

The Chartered Accountants, Cost and Works Accountants, and Company Secretaries (Amendment) Bill, 2021, was referred to the panel for review on December 21.

The Bill Proposes changes to the legislation that govern chartered accountants, cost accountants, and corporate secretaries.

“Our memorandum has already been submitted to the Parliamentary Standing Committee on Finance.” On February 3, they’ll hear us,” ICAI President Nihar N Jambusaria told PTI on Thursday.

There are three significant difficulties, according to him, including the disciplinary committee and the approval of names of CA companies registered with the ICAI. The proposed coordination committee between the institutes of chartered accountants, cost accountants, and corporate secretaries is another point of contention.

The Disciplinary Committee is made up of two government nominees and three members of the ICAI council, according to the present statute. Two CAs (Chartered Accountants) and three non-CAs are proposed in the bill.

Furthermore, it has been proposed that the disciplinary committee be led by someone who is not a CA.

“We’re asking for the current status to be maintained, and they’re proposing that even the presiding officer be non-CA… we’re saying that if a non-CA becomes the presiding officer, he won’t understand the nitty-gritty of accounting standards, auditing standards, ethical standards, and it’ll be difficult for him to make a decision in any case,” Jambusaria said.

Currently, the disciplinary committee’s presiding officer is the ICAI President or Vice President.

“There are two government nominees, and we currently make decisions by consensus… if they want three non-CAs, at least the presiding officer should be a CA,” he said.

The law proposes, among other things, that CA firms be subject to the disciplinary procedure, and the ICAI has no objections to this.

However, Jambusaria stated that the ICAI has been asked to accept the name of a firm that is not identical to that of an existing CA firm in India or abroad.

“We’re requesting an amendment because no one maintains a database of accounting companies in other nations. The ICAI will not be able to determine whether a new firm’s proposed name is similar to a firm’s name that already exists in a nation other than India “ He made the point.

In response to the suggestion to form a coordination committee across institutes, the ICAI President stated that the committee’s mandate should be limited to merely coordination.

“They’ve covered a few more areas, and we’re urging them to drop (them) since the three institutes are autonomous bodies…” he continued.

Chartered Accountants, Cost and Works Accountants, and Company Secretaries (Amendment) Bill, 2021 was tabled in the Lok Sabha by Finance and Corporate Affairs Minister Nirmala Sitharaman on December 17.

The bill was later referred to a Parliamentary committee, which is anticipated to report during the Budget Session. The first portion of the session will run from January 31 to February 11, with the second section starting on March 14 and ending on April 8.