The minister of corporate affairs Mr. Veerappa Moily on 12th December 2011 moved 3 bills namely; the Chartered Accountants (Amendment) Bill, 2010, the Cost and Works Accountants (Amendment) Bill, 2010 and the Company Secretaries (Amendment) Bill, 2010
These bills were to amend sub-section (2) of Section 2 of three Acts namely the Chartered Accountant Act, 1949, the Cost and Works Accountants Act, 1959 and the Company Secretaries Act, 1980.
The main object of these three bills is enabling to members of all three professional institutes to form a limited liability partnership firm. One more significant step is to change the name of “the Institute of Cost and Works Accountants of India” to “the Institute of Cost Accountants of India”. However the FICWA and AICWA are replaced with FCMA and ACMA due to opposition of some section of professionals.
Mr Ahluwalia discussed that all three professional services under one roof under one firm name may increase quality of services. He supported globalization of our services and their harmonization with international standards and norms. There was one major concern was transparency of professional conduct aftermath of Global Trust Bank, Satyam, and other scam worldwide. He advocated stringent penalties upon auditors, in case of their failure in their duties. He noted that for more than 8 lacs companies in India there are only 21836 Company Secretaries and 1,61,516 Chartered Accountants. He said that they all are overburdened professionals and it compromise quality. National Manufacturing Policy will improve scope for Cost accountants.
Dr. Mungekar discussed relation of black money and professional management of companies. A big part of black money generated and routed as FDI into India as par advises provided by these professionals. Professional ethics are declining very fast. He warned of Cartels in the professional services.
Mr. Brajesh Pathak reemphasized need to control tendencies to regularize black money by these professionals through their professional advises.
Mr. Rangarajan acknowledged that India stand second on the number of Chartered Accountant, next only to United States. He warned of surrogate professional firms. He demanded immediate actions against surrogate firms. He questioned SEBI, RBI, MCA and Institutes and Big Professional firms in Global Trust Bank, Satyam and other cases.
Mr. Mohapatra claimed that Every time you go to file your income tax, your chartered accountant will tell you how to avoid paying tax by making a very thin line between tax avoidance and tax evasion.
In his Reply Mr. Moily said the limited liability partnership is always viewed as an alternate corporate business vehicle that provides the benefits of limited liability. But also allows its members the flexibility of organizing their internal structure as a partnership of a mutually arrived agreement. It will enable the entrepreneurs, professionals, enterprises, corporate bodies, what kind of services they require. we wanted 100 such legal entities to come up within five years or ten years.
In fact, it is right that multinational companies come as management consultants and have started functioning through surrogate firms. They have done it. ICAI has examined the violations of these multinational funds. They were examined by the Ministry, and the matter has been taken up with the regulatory authorities like RBI, SEBI etcetera. They are under serious consideration, and we will try to expedite those proceedings.
…in fact, after independence, why a colonial name like Chartered should be there. You know, this is a matter which is left to the Chartered Accountants of India to consider; I do not want to make further comment on that.
Thereafter, Rajya Sabha Passed all three bills one by one.