ICAI intensifies disciplinary action against errant CAs

New Delhi, Dec 5, 2024

Facing criticism over poor disciplining track record, the Institute of Chartered Accountants of India (ICAI) has stepped up action against errant members.

While 2,652 chartered accountants have been found "prima facie guilty" of misconduct since the current mechanism was put in place in 2007, in recent years, more action has been taken, thanks to more proceedings.

Between April and Aug, over 200 hearings have been completed in 71 sittings of the panel with some of the CAs seeing their membership cancelled for one month to five years, sources in ICAI said. Last financial year saw a record number of sittings at 366, which was almost three times the number in 2022-23.

This year's number of punishments awarded is the highest in three years but that's because several of the cases have been closed due to a Supreme Court order.

"Out of the 2,652 cases referred for enquiry, hearing has been concluded in 2,284 cases after giving due opportunity of being heard to the parties to the case by the Board of Discipline and disciplinary committee, as the case may be," a source said.

Of the cases where hearings are over, in 1,080 of them CAs were held guilty of professional or other misconduct. Within this, 486 cases were referred to ICAI by govt, where hearing has been completed in 387 cases and 165 members were held guilty.

Over the years, ICAI, which regulates the profession, has faced criticism for its poor disciplinary record, prompting govt to take away some of its powers and set up the National Financial Reporting Authority (NFRA). The new agency has been tasked with looking into cases involving auditors and audit firms for listed and large companies, drawing considerable protest from the CA community.

A senior ICAI functionary, however, defended the disciplinary track record arguing that earlier the institute did not publicise action against its members, resulting in a perception being created.

[The Times of India]