The Hindu Business Line : Will `dual practice' become a thorny issue? — Institutes' coordination committee to meet this week

WILL allowing `dual practice' become a thorny issue for the three professional institutes — company secretaries, chartered accountants and cost & works accountants — that are making efforts to create a synergy between their members?

Even though the professionals feel that there is a need to enter into partnerships to meet the challenges of globalisation, according to informed sources, the Institute of Company Secretaries of India (ICSI) Council is not in favour of allowing its members to do simultaneous practice.

The meeting of the Coordination Committee comprising representatives of three institutes is slated to meet this week, which among other issues, would also discuss the matter of `dual practice', sources told Business Line.

Elaborating on the concept of dual or simultaneous practice, they said, "This allows a professional to practice in the services they are qualified in and not restrict them to any one. In fact, the Institute of Chartered Accountants of India allows its members to do simultaneous practice, i.e, if a CA who is also a qualified company secretary (CS) can provide both the services."

According to CS professionals, the matter needs to be examined before any nod is given. Stating that this will not be in interest of CS profession and investors they said that "the three professions should compliment each other and there is sufficient work available for all".

Besides, if a chartered accountant is allowed to do the job of CS there is a likelihood of the quality of work being affected, they argue. For example, the compliance report, which is essentially prepared by the CS, has a report on the auditor as well. Thus if a CA prepares the report, there is a chance of conflict of interest arising.

Further, the Coordination Committee is also going to discuss the issue of CA, CS and CWA partnerships. The ICSI council had recently given in- principle approval to allow its members in practice to enter into partnerships with other professionals such as chartered accountants and cost accountants. However, the modalities were still to be worked out regarding exclusive areas of practice, training of trainees, name of the firm, partners' liability, disciplinary mechanism and reciprocal arrangements.

The factors that have triggered off this move of partnerships, according to ICSI officials, were the concept of mega firms and private liquidator under the Companies (Amendment) Bill, 2003.

The three institutes — ICSI, ICAI and ICWAI — in 2000, had signed a MoU, which not only deals with professional development and continuing education but also provides for partnerships among the practising members of three Institutes.

There indeed is a growing trend among the companies towards seeking professional consultancy services from the multidisciplinary firms, and this growing trend is acting as a catalyst for professional services providers to strengthen their collective competencies by establishing synergistic relationships with other professionals, the sources point out.