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Analysis Of Sansad TV Discussion: ”CA, CWA and CS (Amendment) Bill 2022”

Analysis Of Sansad TV Discussion:
”CA, CWA and CS (Amendment) Bill 2022”

Relevance

GS 2: Parliament, Indian Constitution

Context

  • Recently, the Parliament has passed the Chartered Accountants, the Cost and Works Accountants and the Company Secretaries (Amendment) Bill, 2022 with the approval of Rajya Sabha. Earlier the Lok Sabha passed the Bill.
  • The Bill amends the: Chartered Accountants Act, 1949; Cost and Works Accountants Act, 1959; Company Secretaries Act, 1980.

Key Provisions of the Bill

Disciplinary Mechanism

  • 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.

Composition 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 the implementation of decisions of the Council.

Registration Mechanism

  • Firms must now register with the Institutes.
  • The Councils must maintain a register of firms containing details including pendency of any actionable complaint or imposition of penalty.

Disciplinary Mechanism

  • The Bill increases certain fines under the three Acts.
  • If a partner or owner of a firm is repeatedly found guilty of misconduct during last five years, disciplinary action can be taken against the firm.
  • The Bill proposes to strengthen the disciplinary mechanism under these Acts and provide for time-bound disposal of cases against members of the Institute of Chartered Accountants of India, the Institute of Cost Accountants of India and the Institute of Company Secretaries of India.
  • The legislation also adds that firms must register with the Institutes by making an application to the respective Councils of the Institutes.

Key objectives of the amendments in the Acts

  • To strengthen the disciplinary mechanism by augmenting the capacity of the Disciplinary Directorate to deal with the complaints and information and providing time-bound disposal of the cases by specifying the time limits for speedy disposal of the cases against members of the Institutes.
  • To Address conflict of interest between the administrative and disciplinary arms of the Institute.
  • To enhance accountability and transparency by providing for the audit of accounts of the Institutes by a firm of chartered accountants to be appointed annually by the Council from the panel of auditors maintained by the Comptroller and Auditor-General of India.
  • To provide for autonomy to the Council of the respective Institutes to fix various fees.

Why a new section “9A” is inserted?

  • The proposed bill seeks to insert a new section 9A in the Act with respect to the setting up of the coordination committee.
  • The objective of the proposed insertion is to harmonize the professions of Chartered Accountants, Cost Accountants and Company Secretaries.
  • The coordination committee shall consist of : (a) the President, (b) the Vice-President and (c) the Secretary of the Council of each of the Institutes.
  • The coordination committee will be responsible for the effective coordination among these 3 institutes.

Conclusion

As these 3 institutes(Chartered Accountants, Cost Accountants and Company Secretaries) together constitute an integral part of Corporate Governance and financial monitoring across the country. Therefore effective co-ordination between three Institutes is the need of the hour.

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