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LS Clears CA Amendment Bill

by Akshat Mathur 31 Mar 2022

Sitharaman said only ICAI had raised the objections, while other two institutes were fine with the amendments

On Wednesday, Lok Sabha passed a bill to reform the operation of chartered accountants, cost accounting officers and company secretaries, with Finance Minister Nirmala Sitharaman saying the changes - or not - affect the agencies' autonomy and are designed in line with best practices in the world. to make these institutes more responsible.

The draft law on chartered accountants, cost and labor accountants and company secretaries (amendment) seeks to appoint a non-certified accountant (CA), a non-cost accountant and a non-business secretary as chairman of the disciplinary commissions of the relevant institutes. . greater transparency of their work.

Sitharaman, who is also the Minister of Business, said the changes would not jeopardize the autonomy of the three institutions. However, it will improve the quality of control and improve the investment climate in the country, he added.

According to him, the changes "will make the institutions more responsible and accountable" and encourage them to adopt the best practices of the world. All parties involved must have more confidence in the audit trail, he stressed.

"There is no proposal or intention to indicate the autonomy of the three institutions , they will continue in office," Sitharaman said in response to a lower house debate.

A bill amending the Chartered Accountants Act of 1949, the Cost and Labor Accountants Act of 1959, and the Company Secretaries Act of 1980 was later approved by the Second Chamber after the amendments proposed by members of the opposition were rejected.

The bill envisages the establishment of a coordination committee headed by a secretary of the Ministry of Trade. It is represented by three institutes. The minister said the three constitutions had previously signed a memorandum of understanding to set up a coordination committee, but the proposal was not useful.

The commission will help manage the institutes' resources, he said, adding that the IIM and the IIT also have coordination committees.

During the debate, opposition members accused the government of interfering in the functioning of autonomous bodies and controlling independent institutions such as the ICAI. The ICAI has also expressed concern about the changes.

Congressman Adhir Ranjan Chowdhury said: "Through this law, the government has cunningly and deliberately tried to consolidate power and usurp the independence of the institutions by abolishing the autonomous structure of the institution in question."

NCP leader Supriya Sule said his main concern was the autonomy of the three accounting institutions. "You give examples of IIT and IIM. But these institutions are funded by the government when they are not. How can they be compared? Doesn't that deprive these institutions of autonomy?" he asked.

Sitharaman said only the ICAI objected, while the other two institutions were good at making changes. "When we consulted with stakeholders, all institutions provided their individual input, ICSI and cost accountants had no objections," Sitharaman said. The bill was first introduced in December last year, but was sent to the Standing Committee for further consultation. The commission, led by former Finance Minister Jayant Sinhou, submitted a report last week, approving the amendment and rejecting the ICAI's objections.

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