Lok Sabha Question No. 157 (UNSTARRED), answered on 2020-09-14
Subject: Chartered Accountants Act
Ministry: FINANCE
Asked by: K. Shanmuga Sundaram

## GOVERNMENT OF INDIA

## MINISTRY OF FINANCE DEPARTMENT OF ECONOMIC AFFAIRS

## LOK SABHA UNSTARRED QUESTION NO. 157

## CHARTERED ACCOUNTANTS ACT

## TO BE ANSWERED ON MONDAY, 14m SEPTEMBER,2020/ BHADRAPADA 23,1942 (SAKA)

## QUESTION

## 157. SHRI SHANMUGA SUNDARAM K:

Will the Minister of Finance be pleased to state:

- (2) whether the Government is having any proposal to amend the Chartered Accountants \_ Act;
2. (c) whether the Government is having any proposal to freeze the accounts of the auditor when presented false financial data to the authorities; they
- (6) if so, the details thereof;
4. (d) if s0, the details thereof; and
5. (e) whether the Government can delist the firms in case of concealing the frauds or money laundering done by the clients and if so, the details thereof?

## ANSWER

## MINISTER OF STATE IN THE MINISTRY OF FINANCE (SHRI ANURAG SINGH THAKUR)

- (a) & (6):  Ministry of   Corporate Affairs constituted a High Level Committee   (HLC) under the Chairpersonship of Ms  Meenakshi Datta Ghosh o 10.04,2017 to examine the existing provisions in the Rules and Regulations for dealing with the cases of misconduct in 3 Professional Institutes (3 PIs) viz ICAi (Institute of Chartered Accountants of India) ICoAl (Institute of Cost Accountants of India) & ICSI (Institute of Company Secretaries of India) and to give its specific recommendations on the amendments;, if a view to strengthening the\_existing mechanism and ensure speedy disposal of the disciplinary cases The Recommendations   of the High Level   Committee (HLC) are under   examination and   Inter-Ministerial Consultations. Acts,
- (c) and  investigations into the\_affairs of companies   including  the investigations carried out by Serious Fraud Investigation Office (SFIO), are conducted under the provisions of Companies 2013. Upon submission of inspection/investigation reports, instructions may be issued and actions may be initiated against the concerned entitieslofficers-in-defaultlauditor(s) under the relevant provisions of the Companies Act,2013 and other related statutes, on a case to case basis being Act;
- (e): In the past, SEBI has passed orders against audit firms auditors of listed entities under the SEBI Act, 1992 and Regulations made thereunder:  The directions passed by SEBI against audit firms auditors in various cases involving accounting manipulations financial frauds mainly include the following:
1. Audit firm auditor shall not directly or indirectly issue any certificate of audit of listed companies, compliance of obligations   of listed  companies and   intermediaries   registered with SEBI and the requirements under the SEBI 1992, the SCRA 1956,the Depositories Act; 1996, those provisions of the   Companies Act 2013 which are administered  by SEBL   under   section 24  thereof; the   Rules; Regulations and Guidelines made under those Acts. Act,
- 2 Listed companies and intermediaries registered with SEBI shall not engage the audit firm auditor for issuing any certificate with respect to compliance of statutory requirements which SEBI i compctent O administer and enforce, under various laws