ICAI to soon get powers to act against erring partnership firms

Top body for chartered accountants ICAI will also soon have the power to take disciplinary action against errant partnership firms, with the government proposing amendments to the Chartered Accountants Act.

The top institutes for cost accountants and company secretaries are also given comparable powers.

Als onderdeel van de inspanningen om het disciplinaire mechanisme van de ICAI en de instituten van kostenaccountants en bedrijfssecretarissen te versterken, heeft de minister van Corporate Affairs Nirmala Sitharaman vrijdag een wetsvoorstel ingediend in de Lok Sabha om de wetten die deze beroepen regelen te wijzigen.

Over the years, the government has taken various measures to curb possible abuses by companies. In recent years, the role of some chartered accountants has come under the regulatory scanner.

Against this background, the proposed changes are intended to enable ICAI to take disciplinary action against chartered accountants' (CAs) partnership offices.

At present, the Institute of Chartered Accountants of India (ICAI) can only take action against its members.

ICAI President Nihar N Jambusaria told PTI that the proposed changes to the law would allow the institute to take action against partnership firms.

Several amendments have been proposed to the Chartered Accountants Act, 1949, the Cost and Works Accountants Act, 1959, and the Company Secretaries Act, 1980.

The Chartered Accountants, the Cost and Work Accountants and the Company Secretaries Bill 2021 were introduced in the Lok Sabha on Friday.

In a statement, the Institute of Company Secretaries of India (ICSI) said its scope to address professional misconduct will be expanded to include a member in their individual capacity or as a partner/owner of the company.

“The bill that aims to strengthen the disciplinary mechanism by making the disciplinary board independent will initiate the nomination of a non-member, nominated by the central government, as chairman of the Council. ICSI also appreciates the time-bound resolution of cases proposed in the bill," ICSI said.

The main objectives of the bill are to strengthen the disciplinary mechanisms, provide time-bound resolution of cases against the members of the three institutes, address the conflict of interest between the administrative and disciplinary branches of the institutes, and increase the overall accountability.