President of India, Ram Nath Kovind has given assent to Chartered Accountants, the Cost and Works Accountants and the Company Secretaries (Amendment) Bill, 2021.
- Hereon, the bill will be known as “The Chartered Accountants, the Cost and Works Accountants, and the Company Secretaries (Amendment) Act, 2022,” will make significant modifications and increase transparency in the administration of the three professions’ apex institutes.
It has amended the Chartered Accountants Act, 1949, the Cost and Works Accountants Act, 1959, and the Company Secretaries Act, 1980.
i.The three institutes—the Institute of Chartered Accountants of India (ICAI), the Institute of Cost Accountants of India (formerly known as ICWAI), and the Institute of Company Secretaries of India (ICSI)—will retain the authority to qualify and licence people, as well as to regulate their conduct.
ii.The amendments reinforce the disciplinary process and streamline the functioning of the three professions and their self-regulators, the ICAI, the ICSI and the Institute of Cost Accountants of India.
- This measure is aimed at facilitating decision-making in professional disciplinary matters.
- It also provides more external representation on the Board of Discipline and Disciplinary Committee.
iii. The amendments will establish a coordination committee, led by the secretary of the Ministry of Corporate Affairs, as well as disciplinary procedure timelines. The committee will include representatives from all three institutes.
iv.The Secretary to each Council will be designated as chief executive with the President of India, as the head of the Council. The President will be responsible for ensuring implementation of decisions of the Council.
v.The Government of India’s effort to revamp the disciplinary procedure for professionals is part of a broader initiative to promote corporate governance and improve the quality of essential statutory document drafting and reporting.
vi.The amendments also address the issue of conflict of interest between the administrative and disciplinary arms of the professional institutes.
- It also provides for a separate chapter on the registration of firms with the respective institutes.
vii. Firms are also included under the disciplinary procedure, according to an explanation given by the government when the amendments were tabled in Parliament.
- If a partner or owner of a firm is repeatedly found guilty of misconduct during last five years, disciplinary action can be taken against the firm.
- Chartered Accountants play a key role in the preparation and audit of financial statements.
- Company Secretaries play an important role in ensuring that regulations are followed.
- Cost Accountants are essential in industries where resource and energy consumption must be closely monitored and have an impact on competitiveness of business.