The Hindu Business Line : CA, co secy quality board chief selection norms unclear

THERE is no final word yet on who would be eligible to occupy the post of chairman of the three separate quality review boards (QRBs) that are to be set up to review the quality of audit and other services rendered by chartered accountants, company secretaries and cost accountants in the country.

Belying expectations of professionals that the composition of the quality board would be comprehensively legislated, the Bill to amend the Chartered Accountants Act, 1949 is silent on who would nominate the chairman of the board and what would be the qualification criteria.

It states that the board would consist of a chairman and ten other members. While five members are to be nominated by the ICAI council, the other five would be nominated by the Union Government.

The Chartered Accountants (Amendment) Bill, 2003, which was introduced in the Rajya Sabha recently, merely provides that "the terms and conditions of service of the Chairman and the members of the Board, their place of meetings, remuneration and allowances would be such as may be specified."

The post of chairman of ICAI's quality board has been a topic of debate in the run-up to its constitution. Even though the Naresh Chandra Committee on Corporate Audit and Governance had recommended that the chairman of the ICAI's board should be nominated by the Department of Company Affairs (DCA) in consultation with, not necessarily from, the ICAI, the council of ICAI had taken the position that only a member of the institute should be the chairman.

ICAI's contention is that all the accounting and auditing standards are very technical in nature and that it is only a member of the profession (chartered accountants) who will be able to appreciate the nuances in audit work. The institute had, therefore, written to the DCA that only a chartered accountant should be the chairman.

Similarly, the two Bills introduced to amend the Cost and Works Accountants Act and the Company Secretaries Act respectively are also silent on who would nominate the chairman and what should be the qualification criteria.

The Bills also mention that the terms and conditions of service of the chairman and the members of the board, their place of meetings, remuneration and allowances would be such as may be specified.

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