New Delhi, February 16, 2017
The CA Institute does not see any need for a separate regulator to oversee its members and hopes that the Government would go with the recommendation of the Standing Committee on Finance on this matter, a top official said.
“Our view is very clear. We are doing a good job and we don’t need another regulator. We had lagged earlier in showcasing our capabilities. Now that perception gap is being bridged by engaging with the Ministry,” Nilesh Vikamsey, newly elected President of the Institute of Chartered Accountants of India (ICAI) told BusinessLine here.
He also said the CA Institute — as a regulator of the audit profession — was open to work on its weakness, if any, and make appropriate changes that may be suggested by the Government.
The Veerappa Moily-headed Standing Committee on Finance had recently recommended that it was not in favour of establishing a separate regulator — independent of audit profession — for auditors.
This stance of the Parliamentary panel is being widely read as its veto to setting up the National Financial Reporting Authority (NFRA), which was proposed to be established under the Companies Act as a separate body (independent of the CA institute) to regulate audit quality and protect the public interest.
Vikamsey said the subject of NFRA cannot be considered as a “closed chapter” till the provisions empowering the centre to set up such an authority remained in the statute book.
The ball is now in the Corporate Affairs Minister Arun Jaitley’s court as his Ministry will have to take a crucial decision on whether the government should go ahead and establish NFRA. Technically, the government need not accept the recommendation of a Standing Committee.
Interestingly, the Finance Ministry and SEBI Chairman had already written the to Corporate Affairs Ministry for the establishment of NFRA as it would lead to enhanced institutional oversight over auditors and would lead to enhanced market integrity and transparency as well as protect the interest of investors and other stakeholders including banks, lending institutions and suppliers.
The CA Institute has been opposing the setting up of NFRA as it would take away the oversight power of the ICAI on its members. The ICAI sees constitution of NFRA as an interference in the audit profession.
[The Hindu Business Line]