The Centre on Tuesday referred to Parliamentary Standing Committee a crucial amendment Bill that sought to empower the three accounting bodies — the CA Institute, the Company Secretaries Institute and the Cost Accountants Institute — to take disciplinary action against erring firms, a long-pending demand of the professional bodies.

This Bill, which was introduced in Lok Sabha on Friday by Finance Minister Nirmala Sitharaman, had among other things diluted the representation of the professional bodies in the composition of the respective disciplinary committees.

Arjun Ram Meghwal, Minister of State for Parliamentary Affairs, said in the lower house on Tuesday that the Finance Minister (who was not present in the Lok Sabha) had wanted the Bill to be referred to the concerned Standing Committee. He also said that the Finance Minister has requested the committee to submit its report in the next Budget Session.

CAs welcome move

Reacting to the government’s decision, Nihar Jambusaria, President, Institute of Chartered Accountants of India (ICAI) told BusinessLine that this was a welcome move as it would give the CA Institute an opportunity to interact and represent, particularly on the issue of the composition of disciplinary committee.

“If anything else also they want to discuss on the Bill, we are more than willing. Except for the disciplinary committee composition, there are several good provisions including allowing the professional bodies to take disciplinary action against the erring firms,” he said.

“We are sure the Standing Committee will accept our views on the composition of the disciplinary committee as there is merit in what we are saying. We are so happy that government is open-minded to discuss it and referred it to a standing committee,” he said.

Secretary to CEO

To a query on a provision in the Bill that seeks to designate the Secretary of the CA Institute as a ‘Chief Executive Officer’, Jambusaria said that he “does not see a sea change” to the present functioning, except that the President may after the change be in a position to look after many other developments and activities of the CA Institute.

It maybe recalled that the CA Institute had recently said that the disciplinary committee revamp, proposed in the Bill, was not the best outcome for it and therefore had already written to the Ministry of Corporate Affairs seeking a re-look at the provision, particularly with regard to the composition of disciplinary committee and the Board of Discipline.

“We would prefer the current composition of 3+2 (three institute members and two government nominees) to continue instead of the proposed 2+3 formula (two Institute nominees and three non-Institute members). Even if this is not acceptable, it would be better if the government does a rethink on the presiding officer being a non-member of the institute. The presiding officer has to be a member of the institute and a chartered accountant for the disciplinary mechanism to work efficiently,” Jambusaria had recently said after this Bill was introduced in Lok Sabha.

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