Centre asks ICAI to give monthly reports on CAs

NEW DELHI: ICAI HAS ALSO BEEN ASKED TO TAKE SPEEDY ACTION AGAINST CHARTERED ACCOUNTANTS UNDER PROBE BY AGENCIES SUCH AS ED AND CBI

The government has asked the Institute of Chartered Accountants of India (ICAI) to submit monthly reports on disciplinary action taken against chartered accountants (CA) involved with shell companies, said sources.

The task force of shell companies created in 2017 has directed ICAI to submit the reports on CAs found in operating, audit and certification of such companies. “The task force has been discussing the role of CAs in routing black money through financial institutions using shell firms. It has been noticed that the track record of ICAI in taking action against erring CAs is poor,” said a government official, who did not wish to be named. The official added that punishment to CAs will act as a deterrent.

The ministry of corporate affairs has been asked to monitor all disciplinary action taken by ICAI. The task force created in February last year has members from department of financial services, tax department, central board of excise and customs, CBI, ED, serious fraud investigation office and financial intelligence unit. The team is headed by secretaries of the revenue department and the ministry of corporate affairs. ICAI has also been asked to take speedy action against CAs under probe by agencies such as ED and CBI.

This comes at a time when the government is already increasing regulation for CAs. It is likely to notify the National Financial Reporting Authority, a regulator for chartered accountants (CAs), in January as it gets serious about efforts to crack down on financial crimes including money laundering.

Minister of state for corporate affairs PP Chaudhary had said in a written reply to the Lok Sabha that “in addition to the self regulation mechanism existing within the ICAI framework, there is need for an independent regulator... to oversee compliance with accounting and auditing standards and for oversight of audit professionals.”

The ICAI, however, said that the existing framework is “robust”. “The present system under the disciplinary committee of ICAI is robust. Till 2006 there were huge delays, but we have already brought down the pendency of cases from seven years to three years as of July 2017. This will go down to one year soon,” said Nilesh Vikamsey, president, ICAI.

According to ICAI, till 20 December, a total of 1,583 cases were pending before it and at different stages.

The monthly reports by ICAI is part of the government’s crackdown on financial crimes including money laundering.

Minister of state for corporate affairs PP Chaudhary said in a written reply to the Lok Sabha on Friday that “in addition to the self regulation mechanism existing within the ICAI framework, there is need for an independent regulator... to oversee compliance with accounting and auditing standards and for oversight of audit professionals.”