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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I wholly agree with the contents. Yesterdays mindsets cannot solve tomorrow’s troubles.
The effectiveness of any process depends on the people behind the process. When professional bodies have become political arenas to settle personal scores, the inevitable outcome is what is envisaged in the post. Transforming India the PM’s pet project will obviously include these bodies. As Jack Welch said if we don’t know to control our destiny, someone else will. In this catharsis, eventually only those who respect knowledge and wisdom and not mere authority will survive.
Await further posts on the topic.
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Thank you sir. Your appreciation is valuable.
Appreciate your thoughtful contents. Going by the contents, it appears the professions are in a state of extinct, when regulatory powers are taken away from them. Very unfortunate. Who is accountable for this ? In a way, these Institutes will lose their Professional status itself, as the main criterion for any professional body is its authority to regulate the conduct of its erring members. Exams can be conducted by any University including deemed Universities. UGC may lay down even guidelines for this. I fear, any new Institution with the authority of regulating the professionals of another Institution for misconduct would set a very bad and awkward precedent. In my view this should not be allowed or encouraged. Rather stricter governance norms should be imposed on these Institutions to comply. Sadly senior Ministry Officials are on the governing councils of these professional institutes !! These Institutions should be directed to publish in news papers of wider All India circulation once in three months or so details of disciplinary proceedings undertaken and the punishment awarded and the names and address of guilty members. If the Institutions do not stand up to the expectations of governance they have been preaching and for what purpose they have been set up, then they deserve to be exposed and eliminated. Looks to be drastic. For dire disease, dreadful medicines ! But this does not mean another Institution will supervise and certify their conduct and governance. In such situations these Institutions fall by themselves from public grace, respect and recognition. Then what is the meaning of Statutory Audit, Cost Audit or Secretarial Audit ?? Not a good news.
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Very shocking reading this on Sunday. Its great relief to read the last line. This is really tough one. Once again you succeed this year also. As i’m regular reader of your writings , during the reading I realised that it is the first time you write this in so hurry. Isn’t it?. Any way at the last it is great fun.
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Thank you. Thank you for reading up to last line.
A good, regular and committed reader is always an assets for a writer.
I accept, I wrote this post late evening 31st March and spent lesser time than usual.
I would like to know the mistake, which make you to know “i wrote it in so hurry”?