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.