Chartered Accountants, Cost and Works Accountants and Company Secretaries (Amendment) Bill

In News 

• Recently, the Parliament has passed the Chartered Accountants, the Cost and Works Accountants and the Company Secretaries (Amendment) Bill, 2022 .

Major Feature 

• The Bill seeks to amend the Chartered Accountants Act, 1949, the Cost and Works Accountants Act, 1959 and the Company Secretaries Act, 1980. 
  • It changes the disciplinary mechanism under the three Acts and specifies timelines for disciplinary proceedings.  
• It also provides more external representation on the Board of Discipline and Disciplinary Committee.  
• Coordination Committee: 
  • The Bill creates a Coordination Committee headed by the Secretary of the Ministry of Corporate Affairs.  
  • The Committee will have representation from the three Institutes formed under the Acts.
• Head of the Council:  
  • The Secretary to each Council will be designated as chief executive with the President as the head of the Council.  
  • The President will be responsible for ensuring implementation of decisions of the Council.
• Fines: 
  • The Bill increases certain fines under the three Acts.  If a partner or owner of a firm is repeatedly found guilty of misconduct during the last five years, disciplinary action can be taken against the firm.
• Registration: 
  • The legislation also adds that firms must register with the Institutes by making an application to the respective Councils of the Institutes.
  • The Councils must maintain a register of firms containing details such as pendency of any actionable complaint or imposition of penalty against the firms. 

• Significance: 
  • The bill will bring the required level of accountability and greater transparency. 
  • This bill will improve the administrative and governance mechanism and also help in ease of doing business.
• Criticism: 
  • Objections have been raised over the several provisions of the bill saying that absence of clearly defined parameters coupled with government presence within the Institutes would set dangerous precedents for obscure and intrusive functioning.
  •  The bill seems to curtail the role of professionals and elected representatives of governing councils in each of the Institutes.
  •  The bill makes provision for a non Chartered Accountant as Presiding Officer of the disciplinary committee which could hamper the professional function of the committee. 
  • The mandate of the proposed Coordination Committee may overlap with certain functions of the three Institutes.  
    • Further, being chaired by the Secretary of the Ministry of Corporate Affairs, it may impinge on the independence of the three Institutes. 

Source:BS