Page 10 - A Position Paper on Regulation of Accountancy Profession and Oversight Mechanism in India

observed both in the letter and in the spirit. Yours is the privileged task of making the
membership of the Institute a hall-mark of distinction in professional circles all over the
world. Such a position implies unwearied and unceasing effort on your part.

Government are aware of the importance of your profession and have acknowledged
it in practical terms whenever possible. As you know, Government propose to make
it obligatory for a businessman who is liable to pay Super-tax to file with the income
returns, statements of accounts audited by a Chartered Accountant. Government also
propose to amend the law to enable them to appoint any member of the Income-tax
Appellate Tribunal – whether Judicial or Accountant – to be the President of the Tribunal.
To-day, as you have pointed out, only a Judicial Member can be appointed as a President.
Government have also sought to avail of your wisdom and experience in Committees and
Chapter 1 Commissions whenever they have found it physically possible to do so along with other

public bodies which have justifiable claims on Government recognition.

(iii)

Quoting from the History of Accountancy Profession – Part I (Page 167-169) by G. P.
Kapadia- first before the enactment of the Chartered Accountants Act,

the Bill had a very smooth passage and the Chartered Accountants Act, 1949, described
as an Act to make provision for the regulation of the profession of Accountants was
passed and received the assent of the Governor General in Council on the 1st of May,
1949 and published by authority in the Gazette of India Extraordinary on 3rd of May,
1949. Thus was the long cherished dram for which stalwarts in the profession had been
striving untiringly for years and which had become a symbol of national pride and honour,
realized.

There was great enthusiasm amongst the rank and file about the autonomy bestowed

on the profession as also realization about the additional responsibility the profession
was undertaking to shoulder by the grant of autonomy to it. However, an undercurrent
of dissatisfaction was still visible in the minds of some vested interests who had never
been able to appreciate the aspiration of the members of the profession in India for
achieving autonomy. They continued to exhibit a negative outlook and set on harping
that the profession in India could never aspire to gain strength as in the West and
that the designation of Chartered Accountants bestowed upon its members would
ultimately prove to be unmerited. But it is a matter of great satisfaction to record that
the achievements of the Institute during the years of its existence have been substantial
and significant.

The autonomy bestowed upon the profession of Accountancy in India was complete in
its content and the governmental control was expected to be only minimal. In fact, the
Expert Committee had felt that the nominated element in the Council should be kept at
the barest minimum and disappear altogether after 5 years.

The Act of Parliament provided for the Institute being both as an examining body and
a licensing body unlike other Institutes which serve only as qualifying bodies and the
licensing of practice rights by their members is exercised by governmental departments or
agencies. In India, the provisions regarding audit are contained in the Indian Companies
Act which stipulates that the statutory audit of companies can be conducted by Chartered
Accountants alone and under the Chartered Accountants Act none other than a member
of the Institute is allowed to practice as a Chartered Accountant.
(iv) The ICAI constituted under the authority of Parliament enjoys a special status
wherein the ICAI is responsible for the regulation of the profession. The regulation
herein encompasses all facets of education, practical training, examination, licensing,
continuing professional education, standard setting, peer review, financial report
review and functions which can be seen to be a combination of development and
regulatory aspects. As one amongst the largest accounting bodies globally, ICAI has

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