Page 8 - A Position Paper on Regulation of Accountancy Profession and Oversight Mechanism in India

so as to appreciate the time and efforts involved in a quasi-judicial procedure laid by Parliament in The
Chartered Accountants Act 1949 towards the ends of justice.
It needs to be mentioned that a large chunk of the disciplinary complaints filed unfortunately pertain to
inter-professional disputes, misunderstanding of facts/evidences and differences at the Management
level. Some of the complaints are unfortunately pertaining to marital disputes, family misunderstandings,
etc. and not specifically pertaining to any irregularities conducted by a member of ICAI in the course
of his professional assignments. These cases despite not relating to professional work are treated as
misconduct and member is subject to punishment as the profession expects very high standard from a
member even in non-professional matters as otherwise (example dishonour of a personal cheque), it is
seen as bringing disrepute to the profession. In the context of the present provisions of the Act and Rules
framed, all such cases have to be taken cognizance of and dealt with.

Further, it may also be mentioned that with a view to focus specifically on cases which are received from
Government Departments/Regulators/News Reports on social media/Matters of Public Interest etc., a
specific Bench of Disciplinary Committee has been created to expeditiously monitor and process such

cases on fast track mode and taking them to final conclusion in terms of the procedure prescribed under
the Chartered Accountants Act, 1949 and the Rules framed thereunder. Last but not the least, in fulfilling
the above endeavour for speedy disposal of disciplinary matters, the Ministry of Corporate Affairs had
constituted a High Powered Committee in March 2017, to look into and suggest the amendments in
provisions relating to disciplinary mechanism. The report of the Committee has already been submitted
to Ministry of Corporate Affairs.

Again, the issue, not a panacea is that no other institute or body (such as RBI, SEBI) would initiate
or continue proceedings once NFRA initiates the proceedings will be fraught with jurisdictional or
constitutional or legal problems as each and every other institute or body are set up under an enactment
of Parliament and therefore supremacy over each and every other will raise points and counter points
and therefore again our fervent appeal would be to allow the ICAI (set up under an Act of Parliament,)
to continue to endeavour its role, responsibilities and duties rather diluting our role. Also, diluting the
powers of other specialised regulatory bodies, who review the cases of misconduct. NFRA would be
largely duplicating the same powers as are currently under the Chartered Accountants Act, 1949 and
Disciplinary Mechanism for which ICAI has requested the Government to strengthen it with more powers
as are envisaged in the section. This would be a panacea instead NFRA duplicating and carrying out the
role and responsibilities of ICAI
While the aim of accountancy function is to sub serve the public interest by promoting an investment
climate of trust; it has to be seen that provisions like NFRA would impede the ease of doing business
by associating multiple regulations without bringing the intended impact. An already complex business
regime will be gagged further and an extrapolation of imported governance model is likely to trigger
many a complex scenario which are unfathomable now!

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