Four out of ten disciplinary actions initiated by the Institute of Chartered Accountants of India (ICAI) result in findings of culpability with or lapses by the CA or the CA firm concerned, and penal orders. Yet, the number of cases taken up for scrutiny by the institute continues to be a tiny fraction compared to the total strength of over 400,000 CAs registered in the country.
Even though the CA Act, 1949 was amended in 2022 to further strengthen the accountability of the practitioners and firms, and to ensure that justice is delivered in a reasonable span of time, these disciplinary provisions are yet to be notified.
As per ICAI data, there are 368 pending cases of professional misconduct in front of disciplinary bodies within the institute at present.
Since the inception of the disciplinary mechanism in 2007, some 2,650 cases have been referred for enquiry where prima facie violations of professional conduct were found against the CAs. Out of these cases, hearing has been concluded in 2,284, where the members were either found guilt or came out clean. In terms of punishment, the ICAI has punished 1,080 CAs over the past 17 years, which denotes a culpability rate of 40.7%.
The ICAI’s track record in disposing cases varies every year. In FY23, for example, the institute considered 500 cases of prima facie violations. But hearing were concluded in just 152 cases. In the current financial year till August 31, the institute has disposed 200 cases already, out of a total of 257 reported cases.
At the moment, ICAI has three arms to handle the disciplinary matters. The director (discipline) investigates the complaint, and refers the cases to the two other arms. The second arm – board of discipline – deals with cases wherein either the member has been held prima facie guilty and prime facie not guilty of professional misconduct under the first schedule of the CA Act, 1949. The disciplinary committee, on the other hand, deals with violation cases falling under the second or both schedules of the CA Act, 1949.
The ICAI’s maximum penalty includes a lifetime suspension from the membership and a fine of Rs 5 lakh against the erring CAs.
“ICAI not only performs its statutory duties as a regulator of the profession of chartered accountancy in India by formulating accounting standards in keeping pace with changing economic-scenario but also has enforced the ethical values as enshrined in code of ethics. It has proactively taken action against its erring members, found guilty of professional misconduct through its well-defined robust disciplinary mechanism as provided under the CA Act, 1949 and the rules framed thereunder,” Ranjeet Kumar Agarwal, president at ICAI told FE.
Meanwhile, the Delhi High Court has recently empowered the ICAI’s disciplinary committee to take action against entire CA firm even if no individual can be held responsible for alleged violations.
From: financialexpress
Financial News
