A GOVERNMENT proposal to constitute a supervisory mechanism above the country’s three statutory institutes for accounting, company secretaryship and cost accounting and allowing their members to provide services in each other’s fields has been opposed by these regulators.
Floated by the corporate affairs ministry, the proposal seeks to create an oversight mechanism that will oversee the functioning of the Institute of Chartered Accountants of India (ICAI), Institute of Company Secretaries of India (ICSI) and Institute of Cost and Works Accountants of India (ICWAI). The new regulatory check aims to review the handling of regulatory affairs by professional bodies under their functional domains.
Although these institutes already have a disciplinary mechanism under which their internal boards deal with defaults by members, the government wants to ensure transparency in disciplinary justice and eliminate the chances of an intentional delay by an institute when dealing with a suspected default.
The regulators have opposed the plan, which is at the stage of discussion, saying the qualification and regulatory functions being exercised by a single institute must not be separated. The Centre already has its representation on the boards of the institutes and the need for an extra oversight is uncalled for, an official with one regulator said, requesting anonymity.
The three institutes are also opposing a plan that will authorise them to expand their scope of services in any of the three professional domains: accounting, company secretaryship and cost accounting. According to the regulators, the move will end specialisation and lead to a loss of functional and regulatory autonomy, an official said, requesting anonymity.
The move assumes relevance in the light of the fraudulent activities carried out by the promoters of Satyam— now Mahindra Satyam — where professional lapses took place at several levels.
ICAI, ICSI and ICWAI serve as parent organisations for chartered accountants, company secretaries and cost accountants respectively, and prepare functional and regulatory guidelines related to their fields. The three institutes have been formed under separate Acts of Parliament.
ICAI, ICSI & ICWAI REJECT GOVT PLAN
CA Manish K Dhoot (CA, B. Com, NCFM, CPCM) (5015 Points)
23 September 2009