President’s Communique – September 2010
“Kaun Kehta hai, soorakh aasman mein nahin ho sakta, Ek patthar to tabiyat se uchhalo yaron.”
An Urdu Couplet
(Who says it is impossible to pierce even the sky, all you require is a spirited effort.)
Name Change
As you are aware, The Cost and Works Accountants (Amendment) Bill, 2010, which was introduced to the Rajya Sabha, on April 28, 2010 was under consideration of the Parliamentary Standing Committee on Finance. The Committee submitted their report on August 31, 2010. It may not be out of place to mention that the same Committee in 2004 had recommended to the Government to change the name of our Institute to “The Institute of Cost and Management Accountants of India” after considering the objections of ICAI to the proposal of change of name of ICWAI. They supported the necessity of the change in the name in the context of positive leverage in Mutual Recognition Agreements, enhanced image of the Institute in the international platform strengthening prospects of professional members and in the national interest in having the due share in trade of Management Accountancy services in the world in open competition. In the present report, the Committee has noted that due to the “vehement opposition expressed by ICAI to the proposal in particular” has “prompted a rethink in the matter” and have indicated that “upon considering the matter, the Committee are of the view that as proposed in the Companies Bill 2009, it would be preferable to term the designation attached to the profession “cost accountant”; and rename the Institute as the “Institute of Cost Accountants”.
It is unfortunate that the Institute of Chartered Accountants of India, which we have always considered as a sister professional body, took such a stand by virtue of their larger number and having members in influential positions. It may be noted that the objections of ICAI to our proposed name change is no different from the grounds that were taken by them in 2004, which was not found to have any merit. We from ICWAI made strong representation to the Standing Committee, refuting the concerns expressed by the ICAI, supported by references to national as well as global international practices.
It appears that the Committee considered the function of our members as defined under Section 2 of the CWA Act in its present form and has proposed to drop the word “Works” from the designation of a Cost Accountant. With due respect, I would like to submit that the Committee should on the same logic propose to change the name of the ICAI to “The Institute of Financial Accountants of India” since section 2 of the ICA Act states the function of its members as auditing and verification of “financial” transactions. In any case, the word “Chartered” is a legacy of the British Raj and the name itself was borrowed from the English Institute which had a Royal Charter. Our legislators should seriously consider whether we should continue with such a designation after celebrating the 64th year of Independence. I call upon our members and right thinking people of the society to impress upon the Legislators, Regulators and the Government of India to seriously consider whether an autonomous body constituted under an Act of Parliament of a sovereign country should be allowed to continue the word and designation “Chartered”.
The ICAI in its argument has stated that the change in the name of ICWAI to ICMAI would create confusion about the role and scope of the members of the two Institutes. As per the proposal of the Committee, if our name is changed to “The Institute of Cost Accountants of India” (aka ICAI), we should then logically be allowed to use the abbreviations “ACA” and “FCA”. I leave it to the judgment of the members of our Institute, members of the ICAI and the Government to decide which will be more confusing – the proposed name change as per original bill or as expressed in the Standing Committee Report.
The ICAI, which got constituted under an Act of Parliament before ICWAI, have had the advantage of statutory and regulatory backing from the beginning which unfortunately ICWAI never had. As a true professional body, our Institute has always supported the cause of professionalism even during the period when the profession of Chartered Accountants faced the crisis of public confidence in their profession recently. We have always been of the opinion that all the three professional bodies should work hand in hand for the development of the country and improving the competitiveness and corporate governance of the economy. In the country’s economic growth each profession has a vital role to play within the space which are clearly distinct and have been earmarked by the respective Acts of Parliament. The power that lies with the professionals should be harnessed to the country’s development and not bent upon trying to stifle and suppress the growth of fellow professions.
I am sure that the Ministry of Corporate Affairs headed by an intellectual par excellence Hon’ble Minister of Corporate Affairs Shri Salman Khurshid ji with able support from team of experts led by Shri R Bandyopadhyay, Secretary, MCA will take into consideration all the issues and I am sure the Institute will get justice.
The Report provides in detail the arguments by the ICWAI and the solid and logical grounds put forward by the Ministry of Corporate Affairs, for the name change. The report is available on the website www.loksabha.nic.in.
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