A policy document, copy of which is available, say that Ministry of Corporate Affairs is planning to reorganise role of three corporate bodies namely; Institute of Chartered Accountants of India (ICSI), Institute of Company Secretaries of India (ICSI) and Institute of Cost Accountants of India (ICAI). After introduction of National Financial Regulatory Authority (NFRA) under the Companies Act, 2013, there was long-standing speculation about the role of these three professional bodies. This policy document, which is in nascent stage, say all policies and standard making powers shall vast in either in the National Financial Regulatory Authority (NFRA) or some other body with broader mandate. Regulatory role of these three bodies is also under public discussion after concerns raised by parliamentarians and top foreign investors.
This proposed body shall have several arms to standardise and internationalize accounting standards, secretarial standards, costing standards, corporate governance norms and social responsibility norms among others. This institute may work as independent think tank under administrative supervision of Ministry of Corporate Affairs. This proposed body may have representation from various central ministries, state governments, Industry bodies and other regulators. A highly placed source in government indicates that ICSI and ICoAI have recently initiated to streamline their secretarial and costing standards to save their policy making role. Any further fault in this streamlining process may fatal for standards making role of these institutions.
The said policy document also emphasis on regulatory role. There was strong criticism from all quarters that these institutes, particularly, ICAI fails to initiate action against erring auditors in recent high profile cases related to fraud and misappropriation. This is also interesting that recently SEBI, not ICAI used its jurisdiction to bar an auditor to issue any report or certificate to listed companies. Similarly, SEBI also acted harshly on several company secretaries in various violations but ICSI failed to raise a question of professional misconduct against these company secretaries. There is gross dissatisfaction among members of these three professional bodies related to regulatory roles. Some members with small and medium size of their practice indicate that in private conversation that due to lack of cases could not be initiated against present, past and future central and regional council members. This policy document has some indication that such regulatory roles of these three institutes be vested into the Ministry of Corporate Affairs (MCA) or National Company Law Tribunal (NCLT) and be dealt with provisions of the Companies Act, 2013 and three statutes presently dealing with these professions.
An independent analyst says that such moves may reduce these institutes to only examination bodies to entry into these professions. At present, these institute run mainly postal coaching and void is being filled by private coaching centre. This is also learned that some private universities are planning certificates courses aiming to provide coaching to these professional courses.
A source from one of these institutes, on condition of anonymity says, “Such policy decision may leave these institutes with the task they love most – event management.” Some of the candidates for their council elections in their manifesto promise for more events for members on monthly and weekly basis. A candidate for next central council for one of these instituted have already made public that he is willing to organise two events daily for 365 days if he would be president. A corporate travel agent confirms about increased volume of enquiry for travel ticket and visa facilities for next few years to attend events to be organised by some Indian organisers at exotic foreign location.
A copy of this policy document may be assessed here on or after 1st April.
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