The ‘Chartered Accountants, the Cost and Works Accountants and the Company Secretaries (Amendment) Bill, 2021 was passed in the Rajya Sabha by voice votes on April 5, 2022, after the Lok Sabha passed it on March 30, 2022.
The amendment seek to prevent a measure to prevent scams in the corporate world. Here are 8 updates the Bill brings that you have to know. The government has passed legislation to create and regulate professions like CA, CS, and CMA, to ensure that the corporate sector runs well. Presently, the below Acts govern these professions:
The Chartered Accountants Act, 1949
The Cost and Works Accountants Act, 1959 and
The Company Secretaries Act, 1980.
Bill mainly focuses on a few main points:
📎The Composition of the Board of Discipline (BD) and the Disciplinary Committee (DC)
📎The Constitution of a Coordination Committee
📎The Liability of firms for the misconduct of a partner
📎The Timeline to complete disciplinary proceedings
📎Role of the President and the Secretary
📎 The firms will now have to register with the Institutes, and the Councils must maintain a register of firms containing details including pendency of any actionable complaint or imposition of penalty.
📎Registration with the Institute
📎Term of Council Member in the committee
📎Increasing competition (IIAs)
📎 Coordination Committee, which will be headed by the Secretary of the Ministry of Corporate Affairs (MCA). The Committee will have representation from the three Institutes formed under the Acts. The ICAI had concerns over this as it felt that this would hamper decision making.
📎 A member of the CA Committee can enjoy two terms of 4 years each.
📎 It changes the disciplinary mechanism under the three Acts and specifies timelines for disciplinary proceedings. It also provides more external representation on the Board of Discipline and Disciplinary Committee. If a partner or owner of a firm is repeatedly found guilty of misconduct during the last five years, disciplinary action can NOW directly be taken against the FIRM. The firms can now be suspended or permanently removed from the Registers.
📎 The Bill now reprimand, or remove the members from the Institute, or impose a fine of up to Rs 5 lakh. The Bill has increased the maximum amount of fine to Rs 10 lakh.
