The Hindu Business Line : Will the bully give back toffees or just wrappers?

LONG after sending its views to the Department of Company Affairs, the Institute of Chartered Accountants of India has posted on the Web site its `preliminary response' to the CA (Amendment) Bill, 2003. It is a sob story of sorts, beginning with a list of things the Institute asked for but has been denied by the Bill, as if complaining to Santa about the gifts he didn't bring. These were "recommendations regarding capacity building of Indian CA firms, brand building, making them globally competitive and unshackling them in the liberalised environment". With the government too keen on locking the accounting body into a babu-driven regime, finer demands such as multi-disciplinary partnership, fee sharing with non-members, percentage/success-based fees, raising the ceiling on the number of partners in the firms, networking of CA firms, and responding to tenders/enquiries have been sidelined.

"The provisions regarding Disciplinary Committee have been inadvertently drafted creating operational problems," reads the response. For instance, the ICAI wanted to have a `screening committee' that would act as a filter before complaints reached the disciplinary committee, but the Bill filtered out that suggestion. "Disciplinary Committee has been omitted from the Standing Committees of the Institute," laments the ICAI's response, though it is business as usual in the new Council where, till the axe falls, if it does, there is a disciplinary committee in place.

Funding of the Appellate body is another source of headache or potential purse-pinch. Allowances to the Chairperson and members of the Appellate Authority are required to be borne by the ICAI.

"Up to now the Bill or references mechanism is to the High Court and therefore no part of the expenditure of the functioning of High Court was borne by the Council." The new arrangement, if operationalised, would have the expenses funded by the members through fee hike.

Other variances include that the ICAI would like to set up the Quality Review Board rather than let the Government do it; that the Institute have its say on the board's composition and chairman; and, most important, the Board is "only for ensuring compliance and not for setting standards."

If the Institute has said in recent times anything positive about the other two bodies — the ICSI and the ICWAI — it could be this: "In respect of bringing uniformity in the three Institutes, the suggestions are for liberalising them instead of putting restrictions on the ICAI." The Institute appeals that it was autonomous even in the era of controlled economy, so why not now, when we live in an "era of economic liberalisation and globalisation"?

Also, issuing directions and so forth "is contrary to present policies of the Government and the desire of the Hon'ble Prime Minister for economic advancement". So, "the proposed provisions relating to approvals for foreign travels and issuance of directions should be withdrawn."

Considering that the letter is dated January 9 and put on www.icai.org on February 13, after the new Council took charge, it would be reasonable to expect a detailed response to the DCA soon. However, it is doubtful if the ICAI would carry its belligerent stand further in such a response.

AccountSpeak@thehindu.co.in

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