‘Bill on professional bodies to bring in global practices’
NEW DELHI: Finance and corporate affairs minister Nirmala Sitharaman on Tuesday told Rajya Sabha that the new Bill to amend the laws governing professionals like chartered accountants, cost accountants and company secretaries was brought in with the idea of ensuring greater robustness and accountability in corporate governance.
In her reply to a discussion on the Chartered Accountants, the Cost and Works Accountants and the Company Secretaries (Amendment) Bill, 2022 in the Upper House, the minister said that the new legislation does not change the composition of the Councils responsible for the management of affairs of the three professional institutes-icai, ICSI and ICWAI. It is global best practices which govern many of the features of this Bill, Sitharaman said.
The Bill, passed by both the Houses, seeks to strengthen the disciplinary mechanism of the three professional institutes and provides for more external representation on the disciplinary panels of the institutes.
The minister said that in an era where self-regulatory model has already come into question, global best practices clearly say self-regulatory model probably cannot actually meet all the expectations.
Sitharaman said that the government’s focus on promoting entrepreneurship is leading to incorporation of new companies and limited liability partnerships. “At this time, the sanctity of the audited financial statements of companies, which is where the role of chartered accountants come into play, is to be maintained… We need favourable investment climate,” the minister said.
Sitharaman also explained that chartered accountants, cost accountants and company secretaries are three pillars in the corporate governance structure. “If corporate governance is to measure up to global investor expectations about our standards of audits, we need to have greater robustness and level of accountability,” the minister said.
There is no change in the composition of the Council responsible for the management of affairs of the three institutes, the minister said. ICAI has 40 members, 8 of them government nominees and 32 elected members. The institutes therefore shall continue to function under the overall control, guidance and supervision of their respective councils, the minister said.