Professional Body

28 April 2007 |

The definition of Professional Body from Reference.com


"A professional body or professional organization, also known as a professional association or professional society, is an organization, usually non-profit, that exists to further a particular profession, to protect both the public interest and the interests of professionals. The balance between these two may be a matter of opinion. On the one hand, professional bodies may act to protect the public by maintaining and enforcing standards of training and ethics in their profession. On the other hand, they may also act like a cartel or a labor union (trade union) for the members of the profession, though this description is commonly rejected by the body concerned."

The first half of the definition is very sweet and text book type definition what the public knows about and second is what the professional body does.

I am writing this blog in particular reference to Indian Accounting bodies.

There was a reference by RV in CMA Yahoogroups "How many prerogatives and previlages can one body enjoy ? in a democracy-craving" with reference to ICAI, India. To which I found one of the reports in DCA website sharing same concerns.
3.02 In most countries, the regulatory role is carried out, to greater or lesser degree, by professional bodies representing certified public accountants. Whilst in some countries the regulator is a re are merely voluntary “non-statutory” self self-regulating organisation, in some others they are creatures of a specific statutes. In IndiaHere, the Institute of Chartered Accountants of India (ICAI) has been set up under the Chartered Accountants Act, 1949, to examine and regulate the profession. Similarly, the Institute of Company Secretaries of India (ICSI) has been set up under the Company Secretaries Act, 1980, to regulate its members. Analogously, and the cost accountants are regulated by the Institute of Cost and Works Accountants of India (ICWAI)Institute of Cost and Works Accountants of India (ICWAI) regulate the cost accountants. Indeed, these three professional organisations are statutory bodies created by acts of Parliament, and not mere self-regulating organisations.

3.09 The opinions expressed by those who met with the Committee were split along the middle: one set of people fervently advocated the setting up of an independent Public Accounting Oversight Board, while another — most notably, many chartered accountants, argued otherwise.

In India, we have only one Accounting body that conducts financial audits, frames accounting standards and behave like a bully .... trade union tendencies (I am coming to second part of definition).

Read the statements of President of ICAI. Read CAinIndia

The RBI move has huge ramifications for accounting and audit firms in India and adversely affects their business. “Almost 35-40% of CA firms, especially the smaller ones, will be hit by the RBI directive,” said the ICAI president Sunil H Talati.

Read Financial Express

"We believe internal auditing is the sole prerogative and core competency of a chartered accountant. No other professional body should be allowed to provide such services," Talati said.

Read Hindu Business Line ICAI opposed name change of ICWAI with objections that word "Management" would create confusion.
ICAI Act does not explain anything about the word "Chartered" but it changed from Registered Accountant to Chartered Accountant in 1950. They forgot India is a republic and ICAI is the only govt. recognised body in the country that uses the word "Chartered". Read my earlier blog.

You may notice the ICSI Act

Pursuant to section 383A of the Companies Act, 1956, companies with a paid-up share capital of Rs.Two crores or more are compulsorily required to appoint a whole time Company Secretary who must he member of the Institute of Company Secretaries India.

Every company having a paid-up share capital of Rs.Ten Lakhs or more but less than Rs.Two Crores, is required to engage the services of a Secretary in Whole-time Practice for issue of compliance Certificate.

My question is why a paid employee of a company who functions a company secretary be a law professional or member of other accounting bodies in India. When you practise as a company secretary, then you should be a company secretary from ICSI... but is the case when in employment.

The Companies Act does not have any minimum qualification for "Director" !!!

ICWAI is slow mover in every area concerned and tries to catch with everybody.

The above discussion has been focussed on professional body acting like a cartel.

The second question is

"professional bodies may act to protect the public by maintaining and enforcing standards of training and ethics in their profession"

Do you feel
  • that standards of training good accounting bodies in India ?
  • Monitoring of Practising Firms about quality standards
  • Effective displicinary actions against the erring professionals
  • Read Disciplinary Misconduct in this report
As a consumer you do not have choice to hire services of accounting professions other than ICAI since there is no other accounting institute in India.

Now India should move towards having a Regulatory Authority/Board for Accounting & Audit Standards and more than one accounting bodies. The quality of bodies should be monitored by the Regulatory Authority so that the professional institutes do not not behave like cartel. And the public would be benefitted.

Your views please.

Regards,

Santosh Puthran



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