Concerned over delinquencies by accountancy firms in cases like Satyam, regulatory body ICAI is seeking changes in the statutes so that fines up to Rs one crore can be imposed on erring entities.
“We have sent a proposal to the government to allow us to take action against erring CA firms,” said G Ramaswamy, the new President of the Institute of Chartered Accountants of India (ICAI).
“We have proposed steps like cancellation of registration or imposition of fine up to Rs one crore on firms found guilty of colluding with companies to commit a fraud,” he said.
At present, the ICAI can take action only against its members.
According to the Chartered Accountants Act, members found guilty of professional misconduct could be barred from practice for up to five years or fined as much as Rs 5 lakh.
The proposal, Ramaswamy said, is part of the report submitted to the Corporate Affairs Ministry on the Rs 10,000- crore Satyam fraud.
“We have recommended for amendments in the Chartered Accountants Act, 1949, so that action can be taken against erring firms for misconduct,” he added.
The President, who takes over from Amarjit Chopra, also said his endeavour would be to improve the brand image of the profession that came under scrutiny, after Satyam founder Ramalinga Raju confessed in January last year of having cooked the account books of the IT firm for years.
The ICAI is currently holding disciplinary proceedings against four internal auditors and two statutory auditors of Satyam Computer Services.
Ramaswamy was addressing his first conference after taking over as the new president of the accounting body for the year 2011-12. He was earlier the Vice President of the Institute.
He has vast experience in the field of taxation, company law matters, audit and management consultancy.
Ramaswamy has also been nominated as Member of the 2nd Quality Review Board constituted of the Government.
Meanwhile, Jaydeep Narendra Shah was elected as the new Vice-President of the ICAI for the year.
Shah was chairman, Board of Studies of ICAI for four years as well as for the Ethical Standards Board.