The finance ministry’s proposal to expand definition of accountant to include company secretaries and cost accountants in the new Direct Taxes Code has the chartered accountants’ community up in arms.
The draft of the DTC, placed for public comments early this month, proposes to widen the scope of the definition of accountant to include other professionals as well. In the Code, the accountants would be responsible for undertaking audit and certification of accounts of assesses, something which has been the domain of chartered accountants so far.
This has the CA community worried. Concerned over the proposal, Institute of Chartered Accountants of India (ICAI) president K Raghu, along with a few council members of the institute, met top officials in the finance ministry last week to impress upon the difference in expertise of CA and other professionals.
“CAs are ideal to do tax audit, we are apt for financial audit. We have told the revenue secretary and the CBDT chairman that this work should be only for CAs as we have the expertise required for the job. They have assured us that they will look into it,” Raghu told The Indian Express.
In the meeting with revenue secretary Rajiv Takru and Central Board of Direct Taxes (CBDT) chairman RK Tewari on April 16, the ICAI officials also said that the move would lead to loss to the exchequer due to issuance of audit certificates by professionals having limited knowledge of audit of accounts. According to the proposed definition of accountant, apart from CAs, company secretaries and cost accountants would also be included in it. The standing committee on finance had earlier urged the finance ministry to include company secretaries and cost accountants in the definition of accountant arguing that it will provide small and medium enterprises a wider and cost effective scope for selection of professionals.
ICAI’s opposition notwithstanding, the proposal has brought cheers for the cost accountants and company secretaries who argue that the move is timely and need of the hour.
“This is timely and appropriate in view global situation. Why should there be a monopoly of one profession? Cost-based and operational audits are required today. This is the age of professional accountants and not chartered accountants. Stakeholders need specific information,” SC Mohanty, president, Institute of Cost Accountants of India, said. He added that the institute will make a representation before the finance ministry after the elections. Widening of definition will benefit other professionals also because several legislations including excise use the definition of accountant from the Income Tax Act.