Should membership and practice number be different to avoid misuse?

Pradeep Kumar Garg 
on 23 May 2019


Dear Professional Friends, 

I am a CA with experience in the manufacturing industry and have the exposure of finance & accounts profile in the industry. Today the industry has to obtain and submit numerous certificates from CA/CS/CMA about their financial & business transactions to various stakeholders of the business particularly banks & financial institutions. It is strange enough that government and different regulatory authorities have issued model formats, guidelines and conditions for issue of various certificates by the professional practitioners and every stakeholder has made its own format, rules and requirements of such certificates, reports and statements in their business policy and loan agreements etc. Anyone can check that formats and required certificates of different bankers & financial institutions are fairly different and so are their requirements.

As you all know that every CA, CMA, CS holds a membership number issued by the respective institute and he may or may not hold certificate of practice and a non practitioner cannot issue any certificate or audit report, but the real question is how the client or bankers or other stakeholders can check whether the person signing the certificate is actually CoP holder or not??

Every audited balance sheet and other financial certificates issued by practitioners only bear the membership number of the auditor or certifying person and the most of the clients, private companies, firms, bankers, financiers, NBFCs and tax authorities are under the impression that if any audit report, certificate, return or declaration is countersigned by any person purports to be certified by a CA or CS or CMA  with his membership number is deemed to be correct and relied upon. This incomplete knowledge has developed a practice by private companies, LLPs, Firms etc to obtain membership number of CAs who are their friends or employees or consultants or auditors etc and submit the day to day certificates to banks and other stakeholders with or without their consent. Many small practitioners have also promoted this practice simply to secure business.

However the scope of misuse of certification by a professional practitioner cannot be ruled out by private companies and firms because today's banking, financial & taxation laws have made it mandatory for everyone to get a certificate from a professional practitioner and every businessperson is asked to submit a certificate from CA, CS, CMA, Advocate etc about correctness of matter contained therein.

In my opinion all the professional fraternity must address the issue raised above and for the interest of profession only suggest the corrective measures to be taken by institutes as well as various regulatory authorities in their guidelines and formats as under.

1. There should be separate number for members and members in practice, holding certificate of practice 

2. Website of institute should be divided in general, students, members & practitioners and web page for students, members and practitioners must open only with their registration numbers as id and passwords.

3. All the bankers, NBFCs, Financial Institutions, public authorities, Tax authorities etc who need certification must enroll the practicing chartered accountants, cost accountants, company secretaries, advocates on their panel and must accept the certificates issued by them only.

4. Regulatory authorities must issue clarification that all certification can be issued only by the person holding certificate of practice and that such person can not be employee, consultant or manager of the client or borrower or stakeholder.

5. All private companies, limited liability firms & partnership firms should be given liberty to get their accounts audited and certified by any CA/CMA/CS/Tax Advocates whether in practice or not and the liability for false report or certificate must be made jointly and severally for both signatories (directors/managers/auditors)  

6. Generally all tax returns and tax audit reports are submitted at the eleventh hour and prove that books of accounts are updated till the end of filing returns. To stop this practice, separate interest must be payable on tax amount for returns filed after due date of deposit of tax to due date of return for given financial year. Penalty for late filing and non filing must also be levied separately.  


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