Urging Indian chartered accountant firms to expand their operations beyond India and seek global opportunities and challenges, the Prime Minister, Dr Manmohan Singh, today called upon them to ensure the countrys corporates conform to high governance standards.
Unless Indian chartered accountant firms come to be recognised worldwide for good corporate governance, they will not be able to compete globally in an increasingly integrated world, Dr Singh said, inaugurating the diamond jubilee celebrations of the Institute of Chartered Accountants of India (ICAI).
Recognising the critical role of the accounting profession in lending credibility to financial markets, the Prime Minister regretted that adequate attention was not given to governance in public discourse.
Describing the chartered accountants as the watchdogs of new corporate world, he said: The dynamism of globalised capital market and emergence of knowledge based economy has posed major challenges to accurate and speedy financial reporting. In the era of protectionism, he pointed out, few bothered about corporate governance and transparency in accounting and management.
Such laxity is no longer possible. Shareholder democracy has come to stay and you are the watchdogs of this new corporate world, he added.
Stating that market participants, investors and shareholders look to the chartered accountants for high quality information, which ensures market discipline and foster confidence of various stakeholders, the Prime Minister also highlighted the need for proper accounting system for funds received and spent by panchayat institutions. This, he underlined, was critical to making decentralisation a success.
With the presence of chartered accountants even in the remotest parts of the country, you can also facilitate financial inclusion and access to finance for the rural poor, through micro-finance and other innovative measures, he added.
Turning to the services sector, Dr Singh noted that India had made a mark in this area and must acquire the very top spot in terms of excellence, professionalism, speed, quality and predictability of service and, above all, reliability and integrity. I would like to see the day when the world looks up to Indian professionals in every field of modern professional work, he added.
In this context he welcomed the law on limited liability partnership being brought in by the corporate affairs ministry by amending the Chartered Accountants Act, 1949.
This, he noted, would help in the consolidation of small firms and promote multi-disciplinary practices in line with the global trends.