Close on the heels of markets regulator SEBI reportedly commencing a preliminary inquiry into the alleged fund diversion and corporate governance lapses at Fortis Healthcare, CA regulator ICAI has said it is also considering looking into the matter from the angle of misconduct by chartered accountants.
ICAI said it had asked the government to ensure that it had the required powers to penalise audit firms found guilty of professional misconduct, and not just individual CAs. Besides, the CA regulator said it would soon be setting up an additional bench of its Disciplinary Committee to fast track proceedings and reduce pendency.
Talking to reporters, newly-elected ICAI president Naveen N.D. Gupta said, “It (Fortis Healthcare case) is under our consideration. We haven’t got any information on it so far, but we are vigilant and will seek the necessary information.”
On the issue of the ICAI’s proposal for more teeth to take punitive action against wrongdoers, he said under the current norms of the CA Act 1949, the ICAI did not have powers to take action against CA firms, and therefore, it had recently asked the government (the Ministry of Corporate Affairs) for the necessary amendments to the CA Act.
“We are facing a perception issue as far as our disciplinary mechanism is concerned. But it is only a perception (that action is not being taken against wrongdoers). We have taken measures to reduce the pendency, including setting up another bench of the Disciplinary Committee (DC) taking the total DCs to two,” he said. Mr. Gupta said there was a proposal to set up one more DC bench, adding that the aim was to ultimately eliminate pendency.
Referring to the technological advances, he said the ICAI would adopt them and soon start e-hearing (over the web) in disciplinary matters. “We want to ensure that there is no delay in delivery of justice,” he said.
On cases against CAs following the demonetisation exercise, he said of the five matters referred to the ICAI, action (penalty and suspension from membership) had been taken in four. On the proposed new regulatory body, the National Financing Regulatory Authority, for the CAs, he said it was unlikely to be set up as even the Parliamentary panel concerned was against such a move.
On other issues, Mr. Gupta said there was a huge potential for increasing India’s exports of CA services, especially in IT-enabled auditing and analytical services. ICAI is conducting re-skilling of the CAs including in the latest technologies and data analytics to ensure that within the next decade it can help create mega Indian IT-enabled accounting and analytics firms. Mr. Gupta said the ICAI would also work on global mobility of Indian CAs through enhanced focus on recognition overseas as well as international placement of Indian CAs. According to the strategic action plan for ICAI in 2018-19, it will work to strengthen its global presence by opening new chapters of ICAI in strategically important countries.
