The Hindu Business Line : Quality review board posts may be limited to experts from select fields

These boards are expected to review the quality of audit, secretarial and cost accounting firms and fix standards for the services provided by members of the three professional institutes.

As against the Government's proposal to appoint the chairman and members of QRBs from the fields of law, business, economics, education, public administration, finance and accountancy, a Parliamentary panel has recommended that the fields could be restricted to law, finance and accountancy.

The Standing Committee on Finance, which had examined the three professional Bills, held that the "fields were too wide and they would not serve any useful purpose." Hence, the panel recommended that only relevant fields such as law, finance and accountancy could be retained.

In 2003, the Government had proposed the setting up of three separate QRBs — one each for the Institute of Chartered Accountants of India (ICAI), the Institute of Company Secretaries of India (ICSI) and the Institute of Cost and Works Accountants of India (ICWAI).

Based on the recommendations of the Naresh Chandra Committee on Corporate Audit and Governance, the Government had proposed amendments to the legislation governing the functioning of the three professional institutes. The proposed amendments would pave the way for setting up of separate QRBs.

The ICAI's QRB is expected to initially review audit quality of firms that had conducted audit for the top 150 listed companies, ranked according to market capitalisation.

While the strength of the ICAI's QRB was pegged at 11 (including Chairman), the strength of the QRBs for ICSI and ICWAI was to be five each respectively.

The Parliamentary panel's report is, however, silent on the crucial issue of who would appoint the Chairman. The ICAI apprehends that the Centre may get itself empowered to appoint the Chairman of the QRB. The Institute had been taking the stance that the Chairman of the QRB should necessarily be a member of the CA institute.

The three Bills also stipulated that all expenditures of the QRBs would have to be borne by the three respective councils of the institutes.

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