The Hindu Business Line : Setting bloodhounds on the watchdogs' trail

The CA Act is undergoing change, and the forebodings are already on the DCA's site for all to see — "a Bill to further amend the Chartered Accountants Act, 1949". The ICAI is not on the cross alone, there is the camaraderie of one Bill each for the ICWAI and the ICSI.

From now on, `A' is for Authority, not accountant, and `B' is not board of studies, but Quality Review Board (QRB), and `C' is perhaps the circumscribed Council. If money is any indicator of worth or its lack, there are wild jumps from ceilings such as Rs 300 to Rs 3,000, and from Rs 200 to Rs 5,000.

What is irking all those CAs who got elected is an amendment that is proposed to Section 16, according to which foreign travel tours of the council members and also of the ICAI's employees would have to be in tune with rules to be specified by the Central Government.

There are those who support this move as a right curb on the freedom that is often abused by the elected representatives at the cost of members' subscription.

But to put fetters on a body that is autonomous and that does not subsist on Budget allocations smacks of being too nosey.

If more bureaucrats need to fill their time overseeing what is happening in Indraprastha Marg, an amendment could as well think of routing all travel bills of the ICAI through some babu.

Disciplinary Committee is going to get cloned, perhaps because more sheep are going astray; the Bill talks of `regional' committees as and when deemed fit.

Again, giving a new twist to PD, which all along meant professional development, there would be a Prosecution Director who would make inquiries in respect of disciplinary complaints. Who can be a PD is not clear from the Bill, but a fair guess would be to clear the lobbies of the ICAI for some black-coat invasion.

Then, there is the Appellate Authority, a new baby that the Bill would bring forth. It would have powers to override the Council in disciplinary matters.

The `Financial Memorandum' clarifies that the expenditure related to PD, AA and QRB would be borne by the ICAI and "there shall be no expenditure of recurring or non-recurring nature from the Consolidated Fund of India."

One wonders if somebody has done a back-of-the-envelope calculation of how much each of these institutions would cost annually at normal level of disciplinary activity.

For accountants who might feel that what has been discussed thus far is not directly impinging their work, a look at QRB's functions should be enough to give a few quick shocks.

The behemoth would fix standards for the services provided by the members of the Institute; review the quality of services provided by the members of the Institute including audit services; and guide members to improve the quality of services.

Since the quality of work done by CAs would be dependent on what they are taught and tested for in exams, one could extrapolate such supervisory mechanism to be in place for reviewing question papers too, say, through a QPRB.

An amendment would empower the Central Government to dissolve the Council if it did not abide by the `general or specific directions' given. A veritable Damocles' sword that would hang above the body's democratic setup, it seems.

And you still want to wish the accountants, "Happy New Year"?

hindubusinessline@hotmail.com

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