CA/CS/CWA Bill: Parliamentary panel mulls for setting up of Accounting Institute alike IIM IIT

Background

The Government had introduced the Chartered Accountants, the Cost and Works Accountants and Company Secretaries (Amendment) Bill, 2021 (‘Bill’) in the Lok Sabha on 17th Dec, 2021. The purpose of the bill was to amend the existing legislation governing these professional bodies namely the Institute of Chartered Accountants of India (ICAI), Institute of Company Secretaries of India (ICSI), and Institutes of Cost Accountants of India (ICoAI). The objective of the amendment was to align the existing legislature with the changing scenario and to bring more transparency.

On 22nd Dec, 2021 the bill was referred to the standing committee for their examination. Based upon the representation of the various stakeholders i.e. Ministry of Corporate Affairs (MCA)/ICAI/ICSI & ICoAI. The committee tabled their report before the Lok Sabha in March 2022.

The Committee in its report has shared its views on the proposed amendments. The standing further proposed of setting up of Institutes of Accounting (IA) similar to IITs and IIMs to end the monopoly of the professional bodies.

Setting up of Institutes of Accounting (IA) similar to IITs and IIMs

During the examination of the Bill standing committee observed that the qualification and licensing of accountants in advanced countries like US, UK, and Canada are done by multiple bodies.

The situation in India is exactly the reverse where one institute has a statutory monopoly over the whole profession. This leads to the lesser scope of improving the quality and competency of the profession.

The Committee felt that multiple bodies on the lines of the advanced countries are required in order to promote healthy competition and to raise the standard and quality of audit and accounting.

The committee further stated that this will also improve the credibility of the financial reporting. Based on the above point the committee recommends that the Government should consider setting up of Institutes of Accounting (IIA) similar to IITs and 1lMs for further development of the accounting and finance profession in the country.

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