New Delhi, March 30: A Bill which amends the Chartered Accountants Act, 1949, the Cost and Works Accountants Act, 1959, and the Company Secretaries Act, 1980 to change the disciplinary mechanism under the three Acts was passed in Lok Sabha on Wednesday. The Chartered Accountants, the Cost and Works Accountants and the Company Secretaries (Amendment) Bill, 2021 was taken up for consideration and passing by Lok Sabha on Tuesday, after a Parliamentary Standing Committee on Finance examined the Bill and proposed changes to a law governing chartered accountants.
The Bill was passed through voice vote. The Bill proposes to strengthen the disciplinary mechanism under these Acts, and provide for time-bound disposal of cases against members of the Institute of Chartered Accountants of India, the Institute of Cost Accountants of India and the Institute of Company Secretaries of India. It also provides more external representation on the Board of Discipline and Disciplinary Committee. The Bill creates a Coordination Committee headed by the Secretary of the Ministry of Corporate Affairs, which will have representation from the three Institutes formed under the Acts.
The Secretary to each Council will be designated as chief executive with the President as the head of the Council. The President will be responsible for ensuring implementation of decisions of the Council. Firms will have to register with the Institutes. The Councils will maintain a register of firms containing details including pendency of any actionable complaint or imposition of penalty. The Bill also 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.
The Bill proposes to change the composition of the two disciplinary entities to allow for more external representation. However, these external members will be selected from a panel of persons prepared by the three Councils. This may be against the objective of resolving conflict of interest between the disciplinary and administrative functions of the three professional Councils. Institute of Chartered Accountants of India has opposed the Bill and called for maintaining the “status quo” on the constitution of the institute’s disciplinary committee stating that the current system is working well. UNI
