CA's asked to gear up

NEW DELHI: Prime Minister Manmohan Singh on Monday regretted the lack of
adequate attention to good corporate governance in public discourses and
cautioned the industry that it would fail to compete effectively in the absence
of global recognition on this count.

Inaugurating the diamond jubilee celebrations of the Institute of Chartered
Accountants of India (ICAI) here, Dr. Singh pointed out that in the era of
protectionism, “few bothered about corporate governance and transparency in
accounting and management. Such laxity is no longer possible...Shareholder
democracy has come to stay...”

Dr. Singh noted that chartered accountants were “the watchdogs of [the] new
corporate world” and said “the dynamism of globalised capital market and
emergence of knowledge-based economy has posed major challenges to accurate and
speedy financial reporting.”

Observing that the role of the accounting profession was also critical in
lending credibility to financial markets, the Prime Minister said: “Market
participants, investors and shareholders look to you [chartered accountants] for
high quality information, which ensures market discipline and foster confidence
of various stakeholders.”

In his address, Dr. Singh asked chartered accountants to expand their
overseas operations and seek global challenges and opportunities and also
highlight the need for a proper accounting system for funds received and spent
by panchayati institutions.

Urging chartered accountant firms to go global, Dr. Singh said: “Like our
engineers, doctors and other professionals, our chartered accountants too faced
global competition and stood their ground. It is for this reason that today they
are able to face the heat of that competition at home also.” Turning to
panchayati raj institutions, the Prime Minister said that the UPA Government had
laid great emphasis on the devolution of financial and administrative powers to
these bodies and asked the ICAI to meet the manpower needs of skilled accounting
personnel for the growing rural economy to “impart local ownership to
development schemes and encourage transparency and accountability”. “A proper
accounting system for funds received and spent by panchayat institutions will be
critical to making decentralisation a success,” he said.

Dr. Singh said that the Ministry of Corporate Affairs had taken an initiative
to amend the Chartered Accountants Act, 1949, to enable ICAI to strengthen its
professional standing. “A law of limited liability partnership is on the anvil.
This would help in the consolidation of small firms and promote
multi-disciplinary practices in line with the global trends,” he said.