LS Clears CA Amendment Bill

Lok Sabha Wednesday approved a bill to revamp the functioning of the institutes of chartered accountants, cost accountants and company secretaries, with finance minister Nirmala Sitharaman asserting that the changes will not impact the autonomy of these bodies and had been proposed in line with global best practices that will make these institutes more accountable.

The Chartered Accountants, Cost and Work Accountants and Company Secretaries (Amendment) Bill seeks to appoint non- Chartered Accountant (CA), non-cost accountant and non-company secretary as the presiding officer of the disciplinary committees of the respective institutes to bring in more transparency in their working.

Sitharaman, who is also the corporate affairs minister, asserted that the amendments will not infringe upon the autonomy of the three institutes. Instead, it will enhance the quality of audit and improve the country’s investment climate, she added.

The amendments she said, “will make the institutes more responsible and accountable” and encourage them to adopt global best practices. All stakeholders should have greater confidence in audit statements, she emphasized.

“There is no proposal or intention to impinge upon the autonomy of three institutes…they will continue to perform their functions,” Sitharaman said, responding to the discussion in the lower house on the bill.

The Bill, which amends the Chartered Accountants Act, 1949, the Cost and Work Accountants Act, 1959, the Company Secretaries Act, 1980, was later passed by the Lower House after rejecting the amendments moved by the opposition members.

The Bill provides for setting up of a coordination committee headed by the Secretary, Ministry of Corporate Affairs. It will have representations from the three institutes. The minister said that earlier, the three institutes had signed an MoU to set up a coordination committee but the proposal could not take off.

The committee would help in managing the resources of the institutes, she said, adding that IIMs and IITs too have coordination committees.

Opposition members during the discussion had accused the government of interfering with the functioning of autonomous bodies and taking control of independent institutes like ICAI. ICAI has also expressed concerns over the amendments.

Congress leader Adhir Ranjan Chowdhury said, “Through this bill, the government is making a subtle and deliberate attempt to consolidate power and to snatch away the independence of institutions by dismantling the autonomous framework of the concerned institutions,”

NCP leader Supriya Sule said that her main concern was about the autonomy of the three accountancy institutes.

“You gave the examples of IITs and IIMs. But these institutes are funded by the government while these are not. How can they be compared? Doesn’t this take away the autonomy of these institutions?,” she asked.

Sitharaman said only ICAI had raised the objections, while other two institutes were fine with the amendments. “When we did stakeholders consultation all the institutes gave their respective input, the ICSI and the cost accountants did not have an objection,” said Sitharaman. The Bill had been first introduced in December last year but was sent to a standing committee for further deliberations.

The committee headed by former minister of state for finance Jayant Sinha submitted the report last week, endorsing the amendment and rejecting the objections raised by ICAI. 

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