The time is ripe for the Government to revisit the disciplinary mechanism governing chartered accountants. The current system, introduced in 2006, has not paid dividends, going by the numbers reeled out by Prime Minister Narendra Modi on July 1. While some feel that data points such as “only 25 CAs being prosecuted in 11 years” do not project the right picture, others point out that the system is being weighed down by the rapid rise in the number of CAs.

Not surprisingly, the volume of cases has gone up in recent decades. India now has nearly 2.75 lakh CAs against a lakh-plus in early 2000. Changes in the CA Act in 2006 shifted the obligation of taking a prima facie view on misconduct to a single person — Director, Discipline. Earlier, the Central Council would take such decisions. Now, the lone individual faces the heat, as the number of complaints keep rising.

Looking into misconduct of professionals is no easy task. It calls for knowledge of accounting, auditing and company law. It is hard for an individual to grapple with all aspects. The Government should either go back to the pre-2006 regime, giving powers to the Central Council, or change the law to build capacity around the Director, Discipline.

The latter could be a good option. Instead of relying on one person, the law can add more people to assist the Director, Discipline. This requires recruitment of people and payment of more money by the CA Institute. There must be a system where the prima facie decisions are spelt in an open court system. That would prevent delays in communication of the prima facie opinion.

It is nearly a decade since the CA Institute made several suggestions to tone up the disciplinary mechanism, including the power to levy penalties on erring CA firms. The Government has not moved on the issue.

Senior Deputy Editor

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