ICSI discriminating between ACS and FCS?

[Akshay Paranjape]

To all the members of the group,

The much awaited notification by ICSI reached our mails yesterday and I take this opportunity to point out the discrimination created by ICSI between its members.

The council seems to be in hurry to implement the guidelines on secretarial audit even thought he new Companies Act has been in force for over a year now. The institute who treats all the practicing company secretaries equal for carrying out assignments under the companies act and other allied acts has capped the number of secretarial audits for those who have less than 5 years experience. Further the institute wishes to implement the rule that only peer reviewed firms shall be eligible for Secretarial Audit. Following are the excerpts from the email

Secretarial Audit

 

A member of the Institute holding a valid certificate of practice shall be entitled –

 

1. to sign Secretarial Audit Report(s) pursuant to Section 204 of the Companies Act, 2013 (Act No. 18 of 2013) subject to the following limits, for each of the financial year under consideration:

 

Sl. No.	No. of years as member of ICSI as on 1st April of each Financial Year	Number of Secretarial Audit Reports
1	Upto and equal to 5 years	5
2	More than 5 years but less than or equal to 10 years	10
3	More than 10 years	20

 

Provided that in the case of a firm of Company Secretaries, the  ceiling in respect of Secretarial Audit as aforesaid would apply to each partner.

 

These Guidelines shall come into effect for issue of Secretarial Audit Report for financial year 2015-2016 onwards.

 I request the Institute to consider the following points before proceeding with the aforesaid notification

1. Experience should not be a crateria for number of audits.

2. How a person who was in employment and has just taken cop after retirement could do 20 audits? 

3. Institute should fix limit not exceeding 5 audits per PCS, irrespective of exp.

4. As on the date approximately 9300 companies are falling under the requirement of secretarial audit and around 7500 CS are in practice it means one pcs is not getting even two audit. If current notification will be promulgated then only 450 company secretaries  who  have more then 10 years exp could do all audit. Then what about the remaining 7000 pcs?

5. Peer Review is done once in 5 years so theoretically it is possible that this may not happen for first 4 years leading to a situation where ACS become ineligible to do the Audit.

It looks more like an exercise by bigger firms / PCS sitting in Mumbai, Pune & Ahm to corner all Audit work as they will surely be themselves on panel of Peer Reviewers and when they get appointed to the review of people like us in Nagpur or similar cities they will for sure report in a manner where our Reviews will not be favourable.  

I request all the members to please go through this notification and register there discontent with the Institute at Chapter/Regional/Central council level.

Regards

CS Akshay Paranjape

Akshay Paranjape & Associate

Nagpur   

      

[K Degaleeswaran]

I Agree to the above view.. Limit should be common for all PCS... and according to me this is unfair.

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[Rach]

I am unable to see the line wherein it says that the PCS must be peer reviewed?

[ACS suresh chaudhary]

Scretarial audit limit on the basis of seniority but after the change in the Companies act both senior and junior stand on same footing regarding new companies act.This is bound to happen in appearance before NCLT also in future.DID it happens to Junior advocates in legal profession?

On Wednesday, April 8, 2015 at 11:23:07 AM UTC+5:30, Akshay Paranjape wrote:

[Amit Mundada]

I do agree with you Akshay.Its clear cut discrimination between FCS and ACS and limits of Audit should be same for all PCS.

ACS Amit B. Mundada,

Associate Company Secretary

Nagpur.

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[Sitaram]

Yes. I think it is not correct to distinguish between a person with less than 5 years experience and more than 5 years experience, since competency is generally not determined only by experience. I have come across many cases where the CS has 10+ years experience but his core area of experience would be other than company law such as finance, HR etc. In such a case a hard working CS having say 4 years experience would be in a better position to carry out a secretarial audit.

Further, when the professionals irrespective of the age and experience are equally liable in case of a wrongful certification under law, the classification on the basis of experience is not a good idea.

It is not exactly a discrimination between ACS and FCS since a person having more than 5 years experience can still be an ACS. Moreover, a PCS can voluntarily apply for a peer review at any time, even when he is new to practice ( i may be wrong on this point).

[nikit kumar]

Dear Sir,
Whats the meaning of Peer review in such case. Does it mean the Secretarial Audit can only be conducted by the PCS who had been reviewed by the Peer Groups. Whether a fresher PCS with one year experience can carry secretarial audit for FY 15-16. Kindly share your valuable views in the matter .

[Anita Chaudhary]

well said sitaram ji.

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Warm regards,

Anita Chaudhary

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