[sbinews] Control over accountants

  • From: sbistcbangalore@xxxxxxxx
  • To: sbinews@xxxxxxxxxxxxx
  • Date: Wed, 24 Dec 2003 10:47:39 +0500

Centre moves bills to rein in accountants 

NEW DELHI : The government on Tuesday moved bills in the Parliament that will 
give it control over chartered accountants, company secretaries and cost 
accountants. Under the proposed amendments to the laws that control the 
functioning of the governing bodies of these professions, the government will 
have the power to give special and general directions to the professional 
bodies and even dissolve them for non-compliance. 

The bills were introduced by finance minister Jaswant Singh in the Rajya Sabha 
today. It states the government can dissolve a council by issuing a 
notification if it persistently defaults on complying with the directions of 
the Centre. The councils would be given an opportunity to be heard. Once a 
notification has been issued to dissolve a council, and pending the 
constitution of a new council, the Centre can authorise any person or body of 
persons to take over the management of the affairs of the council and to 
exercise such functions as may be mentioned in the notification. 

The three bills to amend The Chartered Accountants Act, 1949, The Company 
Secretaries Act, 1980 and The Cost and Works Accountants Act, 1959 further 
state that the Centre may, by notification, make rules to carry out the 
provisions of the respective Acts. These rules can provide for the manner of 
elections and nomination of the members of the council, any act or omission 
which may be determined as professional misconduct, procedure for inquiry and 
submission of report by the disciplinary committee, procedure of inquiry by the 
prosecution director, procedure to be followed by the board in its meetings and 
in discharging of its functions, and approval of foreign travel by the council 
members including the president, among other matters. 

The bill to amend the CA Act proposes to increase the number of elected members 
on the central council to a maximum of 30 from 24 at present, and number of 
members nominated by the central government to a maximum 10 from 6 at present. 
The CS Act and the Cost and Work Accountants Act are to be amended to increase 
the number of members on the central council to a maximum of 15 from 12 and 
nominated person to 5 from 4. 

The larger aim of the proposed amendments is to bring a greater level of 
uniformity in the laws regulating the three professions. The government has 
also incorporated into the bill some recommendations of the Naresh Chandra 
Committee such as setting up of disciplinary committee and an appellate 
authority, and appointment of prosecution director. 

Other proposals in the bills include strengthening of the disciplinary 
committee of the three institutes and providing for constitution of more than 
one disciplinary committee, which will allow disposal of increased number of 
cases; appointment of prosecution directorate to hasten disciplinary process 
and impart some objectivity; constitution of appellate authorities to be headed 
by a person who is, or has been, or is qualified to be, a judge of a high court 
to deal with the appeals against orders of the council. 

For the purpose of inquiry, the council, the appellate authority, the 
disciplinary committee and the prosecution director shall have the same powers 
as are vested in a civil court under the Code of Civil Procedure, 1908. The 
powers can be used for summoning and enforcing the attendance of any person and 
examining him on oath, the discovery and production of any document and receive 
evidence on affidavit. 

The bills also provide for creation of a mechanism for review of the quality of 
professional services rendered by the members, enhancing the powers of the 
council to fix fees, increase the terms of the councils to four years from 
three years now, streamlining the election process and prescribing certain 
restrictions with regards to eligibility of members for contesting election for 
the council of the institutes. 

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