The Hindu Business Line : Cabinet nod to amend CAs Act

THE Union Cabinet on Wednesday gave its nod to a Bill that seeks to amend the Chartered Accountants Act, Cost and Works Accountants Act and the Company Secretaries Act. The Bill aims to improve the functioning of the professional firms in the country.

Official sources confirmed to Business Line that "the Bill incorporating most of the suggestions of the Naresh Chandra Committee on Corporate Audit and Governance was considered and cleared by the Cabinet."

The Bill, among other provisions, seeks to establish three separate quality review boards (QRBs) for the professions of chartered accountants, cost accountants and company secretaries. It is also likely to have provisions relating to prohibition of undue dependence of an auditor on a single client.

A QRB, in the case of chartered accountants (CAs), is expected to, for the first five years, focus its audit quality reviews on the audit firms, which have conducted the audit for the top 150 listed companies, ranked according to market capitalisation as on March 31, 2003. As per the Naresh Chandra Committee Report, the QRB for CA firms would have 11 members, comprising the chairman, five to be nominated by the Department of Company Affairs (DCA) and another five to be nominated by the Institute of Chartered Accountants of India (ICAI).

According to the report, the chairman of the QRB would be nominated by the DCA, in consultation with but not necessarily from the ICAI. This suggestion, however, had not found favour with the Council of ICAI.

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