Professional Independence
Dear Colleague,
Happy Independence Day!!!
Our nation got Independence 68 years ago in
1947, and our institute in 1949.
Since then we were enjoying as an “Autonomous
and Independent Body”, but in the recent years with introduction of new schemes
and laws our professional independence of is in jeopardy…
Here are some examples which raise a question
on our professional independence…
· NFRA is being constituted to
encroach ICAI’s autonomy.
v Powers
to take disciplinary action against its members will be taken over by NFRA from Disciplinary
Directorate, ICAI
v Powers
to set and amend Accounting Standards will be shifted from ICAI to NFRA.
· Section 144 of Companies Act
2013 creating furthers hurdles in growth of small practitioner specially in
small cities and towns, as they will not be able to provide any non audit
services such, internal audit, accounting and book keeping, management services
and filling of returns under various statutes and advisory services to a
company, its holding or subsidiary of whom they are auditor. –Further this has
a adverse financial impact on SMEs who can not afford to have separate
consultant for other services/compliances.
· As per Section 143, 147, and
448 of the Companies Act 2013, auditors have been made liable for heavy
imprisonment and fine for contraventions.
·
Introduction of Income
Computation and Disclosures Standards – Apart from Accounting standards, IND-AS
and IFRS members now need to ensure compliance of all these standards, which
themselves still need to synchronise. Thus creating chaos for members as well
as clients.
·
Autonomy to banks for
allotment of bank audits and substantially increasing the limit of advances
thereby major chunk of branches have come out of the purview of audit. And fixing
different parameters by different bank for selecting the auditor making it
difficult for new and small practitioner to get selected.
·
Tenders systems are leading
to cut throat competition between the practicing Chartered Accountants, leading
to quoting less than break-even fees which ultimately result in compromise in
the quality and efforts due to limitations of resources.
·
Media is targeting the
Chartered Accountants and highlighting their involvement in all relevant and
irrelevant issues without having any idea on role and responsibility of
Chartered Accountant.
And the list goes on…
All this issues are acting as hurdles in
independence of our Profession; these hurdles should be removed so that we can
achieve our professional independence back, which can be done as follow:
Lord
Justice Topes had once famously remarked that “The Auditor is watchdog and not
a bloodhound.
Ø NFRA
should not be constituted and existing NACAS to continue.
Ø Chartered
Accountants should actively involved in deliberation in making laws, effecting
to client.
Ø Section
144 of Companies Act 2013, should be suitably amended so that it does not restrict
the professional opportunities for Chartered Accountant.
Ø Section
143, 147, and 448 should be suitably amended and relaxed and ICAI should be
empowered to examine and take necessary actions.
Ø Coordination
with industry association/chambers like FICCI, CII etc. should be increased, so that
they can represent to the government the practical issues pertaining to
business/Industry.
Ø RBI
only should be given power to of empanelment and allotment of Bank Audits.
Ø Panels
should be formed at ICAI level, who should fix the minimum level of fees
compatible with the nature of work and resource involved and like publication
of tenders report should be ICAI about the allottees and fees.
Ø CBDT
should make an empanelment of Tax Audit and fix the fees based on the turnover,
nature of business and time
Ø ICAI
should take a lead to create a awareness in the society about role and
responsibility of Chartered Accountants.
We have very well contributed in Growth of
Independent India, don’t we have right to grow and be independent….
We should all unite together to get our professional
freedom back.
Jai Hind Jai Bharat!!!
