The Chartered Accountants, the Cost and Works Accountants and the Company Secretaries (Amendment) Bill, 2021
INTRODUCED BY
Ms Nirmala Sitharaman
Minister of Finance
SYNOPSIS
The bill seeks to amend the laws governing chartered accountants, cost accountants and company secretaries with an aim to strengthen the disciplinary mechanism and provide for time bound disposal of the cases against the members of these institutes
HIGHLIGHTS
Salient Points ()
The bill seeks to amend:
- Chartered Accountants Act, 1949
- Cost and Works Accountants Act, 1959
- Company Secretaries Act, 1980
The bill proposes to strengthen the disciplinary mechanism and provide for time bound disposal of the cases against the members of these institutes.
The firms would now have to be registered separately with the respective institutes and will come under purview of disciplinary mechanism.
The councils would have the autonomy to fix various fees and their accounts would be audited and approved by the Comptroller and Auditor General of India.
The bill proposes to change reduce the term CCM and Regional Council to 2 years from 3 years.
Any individual claiming to be a CA, CS, CMA who is not a member of ICAI or council, would be penalize by Rs 1 lakh for 1st time and Rs 5 lakh/10 lakh or 6 months/1year imprisonment subsequently.
The Bill adds that each Directorate must also include at least two Joint Directors to the respective councils.
The board must conclude its inquiry within 90 days after receiving the preliminary examination report.
BACKGROUND
- Over the years, there have been many corporate frauds coming into light.
- The amendments to the Acts have been proposed on the basis of recommendations made by a high-level committee that was set up by the corporate affairs ministry.
CASE STUDY
The Satyam Computers Scam
- In 2009, Satyam Computers founder-chairman confessed that the company’s accounts were tampered by Rs.7,000-crore.
- As many as 7,561 fake bills which were even detected in the company’s internal audit reports and were furnished by one single executive.
- The company’s revenue got over-stated by Rs 4,783 crore over a period of 5-6 years.
- The fictitious invoices were created to show fake debtors on the Satyam books to the tune of up to Rs 500 crore.
TIMELINES
Bill introduced in Lok Sabha
Referred to Standing Committee.
WHY ( as per the govt)
Salient Points ()
The amendment would benefit the country's economic and corporate environment.
It would strengthen the existing mechanism and ensure speedy disposal of the disciplinary cases
It would address the conflict of interest between the administrative and disciplinary arms of the institutes.
The amendments would enhance accountability and transparency by providing for the audit of accounts of the institutes
WHY NOT (as per opposition)
Salient Points ()
ICAI (Institutes of Chartered Accountants of India) had a reservation on having a non CA as the Presiding Officer.
A non CA would not have thorough knowledge of Accounting, Auditing and Ethical Standards to take right judgments on disciplinary case.
MEDIA SAYING
Media Saying ()
VIDEOS
Videos ()
OPINION POLL
Citizen Poll
The Chartered Accountants, the Cost and Works Accountants and the Company Secretaries (Amendment) Bill, 2021
Do you support the bill?
Responses