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New Delhi: The Centre has notified a law, passed in the budget session of Parliament, that amends acts governing accountants and company secretaries, tightening their disciplinary mechanism.
The law ministry said in an official order that ‘the Chartered Accountants, the Cost and Works Accountants and the Company Secretaries (Amendment) Act of 2022’ received Presidential assent on Monday. The notification said that the new law amends the Chartered Accountants Act of 1949, the Cost and Works Accountants Act of 1959 and the Company Secretaries Act of 1980.
The amendments tighten the disciplinary mechanism and streamline the functioning of the three professions and their self-regulators—the Institute of Chartered Accountants of India, the Institute of Company Secretaries of India and the Institute of Cost Accountants of India. The move is expected speed up decision making in the disciplinary matters of professionals.
The amendments specify timelines for disciplinary proceedings and provide for a coordination committee headed by the secretary in the ministry of corporate affairs. The committee will have representation from the three Institutes.
The move to reform the disciplinary mechanism of professionals is part of the government’s efforts to improve corporate governance and the quality of preparation and reporting of key statutory documents.
While chartered accountants play a key role in the preparation and audit of financial statements, company secretaries play a role in meeting statutory compliances. Cost auditors are vital in sectors where use of resources and energy needs close monitoring and have a bearing on the business’ competitiveness.
The amendments also address the issue of conflict of interest between the administrative and disciplinary arms of the professional institutes and provide for a separate chapter on registration of firms with the respective Institutes. Firms are also brought under the purview of the disciplinary mechanism, as per an explanation offered by the government when the amendments were tabled in Parliament. (ends)