The Chartered Accountants, The Cost and Work Accountants and The Company Secretaries (Amendment) Bill 2021 Passed in Lok Sabha



Selected Excerpts from the speech of Hon’ble FM in the Lok Sabha on the ICAI, ICSI & ICMAI Amendments Bill 2021 :

The autonomy of all the 3 institutes isn’t being taken away from any of the matters which concern the functioning or the administration of the institute. As regards the Board of Discipline nothing much is being changed except for the following ones to adopt the global best practices. As per the existing act, The Disciplinary committee shall consist of a Presiding officer who shall be the President/Vice-President of ICAI with 2 members of the Council and 2 Government members represented by GOI nominated by the council from the panel submitted. 

As per the proposed amendment, The Presiding officer shall be a Non-CA selected by the Council and Nominated from the PANEL submitted by the GOI. This is being done to bring global best practices and there is absolutely nothing wrong. The council shall submit the names and from there the Presiding officer shall be selected. I don’t see any issues in a Non-CA heading the Board of Discipline and the Committee can always make the Presiding officer understand stuffs. This is being done to bring more transparency into the affairs.

Concerning the reduction in terms of the council member, at present, it is 3 years per term for a maximum of 3 terms. The ICSI & ICMAI already have the terms of 4 years per member per term. The CA Act is being amended to provide 1 additional year to the council to make as 4 years but reducing the number of terms to 2. So instead of 9 years in total, they serve for 8 years i.e. 2 terms of 4 years which is a substantial time for doing great service and reforms. Earlier the audit firms would not be touched. Now it is being touched. So now the audit firms would be brought into the purview of the disciplinary committee.

Self-regulation was given and we had ILFS, Satyam and so on. After every big collapse, there’s no action on the auditors. So Self-regulation has worked? It hasn’t. Global best practices say it hasn’t and therefore we need to have these and these changes are made ONLY with the disciplinary committee. If the Parliament of India hasn’t passed the ICAI Act and given them the authority, they wouldn’t be enrolling students through which they have the corpus building up. They haven’t put into any equity capital. CA Institute is a result of the Parliament’s act which has given them all in one basket unlike the IITs and the IIMs. To enroll the students, train them, certify them and then keep them as a member to run the practice. All this was enabled by this house. Otherwise, you wouldn’t have the ability to run the institution.

The Constitution of IIA was recommended to the Government but wasn’t been agreed upon. (As per the comments indirectly given by the FM)