The Lok Sabha on Wednesday approved a Bill to amend the Chartered Accountants Act, 1949, the law that governs the Institute of Chartered Accountants of India (ICAI). It also amends the Cost and Works Accountants Act, 1959 and the Company Secretaries Act 1980. Introduced in the Lok Sabha on December 17, 2021, and titled the Chartered Accountants, the Cost and Works Accountants and the Company Secretaries (Amendment) Bill, 2021, the key changes it proposes are: Discipline: the ICAI’s disciplinary committee and board of discipline will be chaired by non-chartered accountants (CA), and its elected council members will no longer be in a majority in them. And then, governance and administration: the term of the ICAI’s Council will be raised from three to four years, and the maximum number of consecutive terms for its elected members will be reduced to two from the current three; the ICAI’s Secretary will replace the ICAI’s president as its chief executive and perform the functions to be specified; the ICAI will appoint its auditor from the Comptroller and Auditor-General of India’s panel of CA firms; and the Government will form a coordination committee for the ICAI and the Institutes of Cost Accountants and Company Secretaries of India.
If done well, these changes should strengthen the ICAI’s accountability, governance, and administration. The Parliamentary Standing Committee on Finance has endorsed these changes and has further recommended an end to the ICAI’s monopoly in certification.
