SOURCE :- THE ECONOMIC TIMES

G Ramaswamy, the new President of the Institute of Chartered Accountants of India (ICAI) while addressing his first conference after taking over as the new president of the accounting body for the year 2011-12 said that they have sent a proposal to the government to allow them to take action against erring CA firms.

Concerned over delinquencies by accountancy firms in cases like Satyam, regulatory body ICAI is seeking changes in the statutes so that various fines can be imposed on erring entities.

They have proposed steps like :-

1) Cancellation of registration, or

2) Imposition of fine up to one crore on firms found guilty of colluding with companies to commit a fraud.

Bt according to present scenario  ICAI can take action only against its members. According to the Chartered Accountants Act, members found guilty of professional misconduct could be :-

1)  Barred from practice for up to five years, or

2)  Fined as much as 5 lakh. 

The President also said his endeavour would be to improve the brand image of the profession that came under scrutiny, after Satyam founder Ramalinga Raju confessed in January last year of having cooked the account books of the IT firm for years. 

I just want to see if this propsal is accepted then what will be its effect :-

• Whether these audit firms will become extra vigilant while performing their duties, or
• these audit firms will find some new ways to protect themselves from the eyes of ICAI.

Lets seeee......