Chartered Accountants (Amendment) Bill, 2010 (as passed by Lok Sabha on 19.12.2011)

The Lok Sabha passed on 19.12.2011 the much awaited Chartered Accountants (Amendment) Bill, 2010, which provides for the following: Firstly, to enable the Members of the Institute of Chartered Accountants of India to form Multi Disciplinary firms i.e Partnership with other recognised professions and offer Multi Professional services in a competitive and commercial manner. It permits to enter into partnership with prescribed profession. Secondly, to extend the benefits of the Limited Liability Partnership Act, 2008 to the Firms of Chartered Accountants under the Chartered Accountants Act, 1949. Though the amendments are brought in the Chartered Accountants Regulations, the existing Companies Act 1956 requires an amendment as follows, till the New Companies Bill is enacted. Section 226 of Companies Act, 1956 Clause 141 of the New Companies Bill 226(1) A person shall not be qualified for appointment as auditor of a company unless he is a chartered accountant within the meaning of the Chartered Accountants Act, 1949 (38 of 1949): Provided that a firm whereof all the partners practising in India are qualified for appointment as aforesaid may be appointed by its firm name to be auditor of a company, in which case any partner so practising may act in the name of the firm. 141(1) A person shall be eligible for appointment as an auditor of a company only if he is a chartered accountant: Provided that a firm whereof majority of partners practising in India are qualified for appointment as aforesaid may be appointed by its firm name to be auditor of a Company The Chartered Accountants Act (as passed in the Parliament) permits Partnership with SPECIFIED PROFESSIONS. Specified Professions are already notified by the Council which includes (a) Company Secretary; (b) Cost Accountant; (c) Advocate; (d) Engineer; (e) Architect; (f) Actuary; and (g) Members of Professional Bodies outside India relating to accountancy and recognized council. If the partnership as per above is entered, the firm cannot be appointed as Auditor for a Company as the existing act requires all the partners in the Firm to be a practicing CAs. Whereas in the New Companies Bill, the corresponding provision is carefully worded as a firm whereof majority of partners practicing in India. Since, the Companies Bill did not find its way in the present winter session (as per the press announcements), the existing Companies Act will see the amendments soon.