The Hindu Business Line : `Relax norms for CAs before FDI'

THE Centre should relax some of the norms governing chartered accountants before it allows foreign direct investment in the accounting sector, said a senior office bearer of the Institute of Chartered Accountants of India (ICAI).

The 26 per cent FDI proposal in the accounting sector, which is still in the initial stage, has raised concerns among chartered accountants, as it would impose certain restrictions on the professionals, Mr T.N. Manoharan, Vice-President, ICAI, told newspersons. Any such action should be preceded by empowerment of the CAs, he said.

Some of the issues worrying the professionals include restriction in the number of partners to 20 and the concept of limited liable partnerships not relevant in India. CAs should be multi-disciplinary firms. Currently, a CA can only have another CA as a partner in India. However, in other countries a CA can have a company secretary or a cost accountant as his partner, he said.

The institute has suggested having reciprocal agreement before opening up the accounting sector. For instance, if US firms are allowed to operate in the country, Indian firms should be allowed to operate in the US,.

According to Mr Manoharan, the institute is mooting the proposal to have the prefix CA before the names of chartered accountants similar to "Dr" for doctors and "Er" before engineers. "We will soon take a decision on this," he said.

The suffix CA would not only create a distinct identify for the professionals but also prevent impersonation. There has been an increase in the number of impersonations, and recently an impersonator was arrested in Indore. The institute is strengthening its legal department in Delhi to deal with this issue.

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