ICAI steps up disciplinary actions against errant chartered accountants

The Institute of Chartered Accountants of India (ICAI), under fire for its poor track record in disciplining members, has intensified its efforts against errant chartered accountants.

Since the current mechanism was introduced in 2007, 2,652 chartered accountants have been found "prima facie guilty" of misconduct. However, recent years have seen more disciplinary action, bolstered by an increase in proceedings.

Between April and August this year, over 200 hearings were conducted across 71 panel sittings, resulting in penalties ranging from one-month to five-year membership cancellations, according to ICAI sources.


In the last financial year, the disciplinary panel held a record 366 sittings—nearly three times the number conducted in 2022-23. This year's punishments have been the highest in three years, partly due to the resolution of several cases following 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," an ICAI source stated.

Among the concluded cases, 1,080 chartered accountants were found guilty of professional or other misconduct. Of these, 486 cases were referred by the government, with hearings completed in 387 cases, leading to 165 members being held guilty.

Despite stepping up actions, ICAI continues to face criticism for its past disciplinary shortcomings. This has led the government to reduce its powers by establishing the National Financial Reporting Authority (NFRA), which oversees cases involving auditors and audit firms handling listed and large companies. The move sparked protests within the chartered accountancy community.

A senior ICAI official defended the institute’s record, stating that the lack of publicity for disciplinary actions in the past contributed to the perception of inaction. "Earlier the institute did not publicise action against its members, resulting in a perception being created," the official said.

(with ToI inputs)