Accounting bodies told to take action against guilty

NEW DELHI: The government has asked professional bodies of chartered accountants, company secretaries and cost accountants to act swiftly against their members arrested on criminal charges, slamming them for the laxity in taking disciplinary action.

The corporate affairs ministry send a letter to the institutes of chartered accountants (ICAI), company secretaries (ICSI) and cost accountants (ICWAI), asking them to initiate disciplinary action against their members coming under the scanner as soon as such incidents came to their notice.

"The confidence of the public in the integrity of members (professionals) is vital," the corporate affairs ministry observed in its missive to ICAI, ICSI and ICWAI.

The move reflects the government's growing unease over the increasing number of incidents, where professionals collude with corporates to dupe investors and regulators.

The role of professionals have come under the scanner in almost all recent scandals such as the Satyam scandal, IPL controversy or the more recent 2G spectrum scam. The move is intended at restoring the reputation of the professions, whose members occupy key positions in most companies.

Noting that members of these bodies discharge important economic functions, the ministry blamed the institutes for failing to initiate suo motu disciplinary action against their members arrested for criminal offences until asked by the government.

For the first time since the financial scam in the erstwhile Satyam Computers highlighted an ugly nexus between corporates and professionals, the ministry has said even if a member is arrested for any criminal offence, not just specific to their professional work, the disciplinary mechanism should be kickstarted at the shortest notice.

It has asked the institutes to put on their official websites a log sheet maintaining the name of the professional who has been arrested and updates on action initiated against him.

"The move, while ushering transparency in the disciplinary process, will serve as a deterrence for similar crimes," an official with the ministry said.

Interestingly, the ministry has asked the institutes to monitor media coverage highlighting the involvement of any of its members.