Govt to launch new KYC norms to weed out fraud CA, CS and CMAs

A mandatory know-your-customer (KYC) exercise for over three lakh professionals including chartered accountants, cost accountants and company secretaries will soon be launched by the Ministry of Corporate Affairs (MCA), reports DNA.

The development follows similar disclosure norms brought in earlier by the MCA for companies and directors. Sources told the paper that the ministry was working on a set of rules for the process, which would be launched over the next three to four months. Restrictions will be imposed on professionals who fail to comply with the proposed disclosure norms.

Moneycontrol could not independently verify the report.

The development follows several complaints that the ministry has been receiving with regard to the functions of chartered accountants, cost accountants and company secretaries being fraudulently carried out by unqualified people.

Use of fake seals, signatures being forged on behalf of members and bogus chartered accountants conducting audits or signing on the books of a company using membership numbers of others are a few of the complaints that the ministry has received, an official told DNA.

A registry of digital signatures of the professionals is also being mulled over by the MCA, the official added. The KYC form to be launched for these professionals will be similar to the one for directors, including details such as their phone and membership numbers, e-mail and postal addresses. The ministry’s plan is to find ways to make sure to keep out such people carrying out audits and other professional functions fraudulently.

“After the KYC exercise is over, we will advise the industry not to employ such unregistered and unqualified persons. We will also ask professional bodies like the Institute of Chartered Accountants of India (ICAI), Institute of Company Secretaries of India (ICSI) and Institute of Cost and Works Accountants of India (ICWAI) to investigate and take action,” another official told the paper. #casansaar (Source - DNA, MoneyControl)