The Hindu Business Line : A few urgent items for the accountants' agenda

For instance, among the issues before the forthcoming AGM of the southern region of the Institute of Chartered Accountants of India is one about disclosure of disciplinary loose ends attributable to elected members of the governing Council.

Onlookers may ask why CAs should be affected by what's happening in the Chirrudih massacre case. But that's the problem with governance; a bad apple cascades, and a single mad cow can create panic everywhere.

One big accounting firm goes under and you have SOX to clean up the system. One thatch burns and we remove all thatches.

While it is easy to label these as knee-jerk reactions, let us appreciate that the system will have to be seen as doing something, anything. To balance national with international, one other item on the agenda of the CAs in the city is to deliberate on a recent announcement by the Public Company Accounting Oversight Board (PCAOB) of the US about registration system for domestic and foreign public accounting firms.

I wish they also discussed more current issues such as why GTB went under, and why we collectively slept like nobody's business even as the bank's net worth was getting eroded.

And, then, there is the topic of whether the latest hike in exam fee for students is justifiable because everybody thinks that the Institute takes money from hapless students and spends the same for members and lavishes luxury on the elected representatives; can we defend the fee-hike with numbers? Or, at least concede cross-subsidising?

Returning to the topic of expecting elected members to be clean of disciplinary proceedings, there are usually two sides.

One argues, `what if', and the other shouts, `shame, shame'. It is common knowledge that many frivolous complaints are made to the Institute about its members — such as to get the ICAI prevent a CA from asking for extra dowry, or requesting intervention to get dues from a CA who has been holding back on his maintenance charges owing to the apartment association.

There is no quick mechanism in the accounting body to filter out such cases and so even as it busies itself with a plethora of ants, some big elephants would walk by unnoticed.

Almost every successive president of the Institute works late hours — a quality that is invariably extolled in meetings — and much of that would be to study the fat files for each disciplinary case. "Do you perform a costing exercise to find out how much you spend to resolve each case?" I had asked Mr Sunil Goyal, the current honcho, when we met recently.

He shook his head. It would be reasonable to guess that one of the big drains for the hiked fee from students would be the disciplinary mechanism for which meetings are held by the Institute all over the country in good frequency.There is no regulation in the CA Act or Rules to mandate disclosure by the council members of disciplinary cases.

So, it would be quite bold if the forthcoming AGM of the Regional Council were to take up and resolve that its helm voluntarily declares facts of pending proceedings, including those faced by partners and firms relatable to council members.

Accountspeak@TheHindu.co.in

D. Murali

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