Has the Proposed Chartered Accountancy Bill Rubbed us the Wrong Way?

Has the Proposed Chartered Accountancy Bill Rubbed us the Wrong Way?

It seems our community (read - Chartered Accountants) feels that the three non-members (read - non CAs), supposed to have shallow knowledge of audit and assurance, cannot deliver fair judgement in the proposed Disciplinary Committee of ICAI. 

This alters the power equation in favour of the three non-members in the committee which oversees complaints and enquiries pertaining to misconduct of members. 

Our community interprets the move as another attempt by the government to assert control over us after the creation of the National Financial Reporting Authority (NFRA) in 2018.

The Bill proposes inclusion of two CAs and three non-CAs (government nominees) in the Disciplinary Committee from two non-CA nominees and three members.

It proposes to have a non-member as the presiding officer of the Disciplinary Committee. It seems this has annoyed our community a lot as the President of ICAI holds considerable influence over the committee's decisions.

The proposals have come after allegations that ICAI Disciplinary Committee has gone very slow and yet to take any tough decision.

The move will not affect the Big Four but small and medium audit firms have to be careful.

ICAI's powers to influence decisions of the Disciplinary Committee will be mostly diminished. 

Our community feels that the government wants to assert control as in NFRA.

It also feels that the approach in most fraud cases has been to go only after the auditors.

It seems the government is about to take away ICAI's powers and see to it that the President as well as ICAI can no more influence the decisions of the Disciplinary Committee.

There is a general inclination against self regulation in our community. The proposed Bill is an attempt by the government to act in an independent way and reduce ICAI's power and influence over the profession.

The main concern in our community is that non-members do not understand our profession, its practicalities and intricacies. If the proposed changes happen there would be an independent and unbiased view in several aspects. 

Over time auditing has become highly technical and specialised. The scope of audit is quite clearly defined through multiple standards. The proposed changes may result in more decisions based on individual judgement than those driven by the governing standards.

Conclusion

The government has proposed the suggested changes after frequent allegations that ICAI Disciplinary Committee had been very slow and too lethargic. It has never taken tough disciplinary actions against the members and particularly the respective audit firms. The cases dragged on for years together. 

I can give numerous examples of violations that have taken place in our community over the last three decades with nothing ever happening to the culprits. The members or the audit firm. I leave that discussion for another occasion.