Sections 16 explained: this guide covers what it means, who it applies to, the step-by-step process, documents required, fees, due dates and penalties in India — so you can stay compliant with confidence and avoid costly mistakes.
Sections 16 to 18 deal with who runs the Council's administration, how its committees are formed and how its money is kept, budgeted, audited and published. Section 16(1) and the 2022 audit rule in section 18(5) are the two places where the 2022 Amendment Act matters most. The Act was called the Cost and Works Accountants Act, 1959 until 10 May 2022.
The Council appoints a Secretary and a Director (Discipline) and designates an officer as chief executive; the 2022 version of section 16(1) is enacted but not in force. Section 16(2)(c) as substituted in 2022 is in force. There are three Standing Committees (Executive, Finance, Examination). The Council's accounts are audited by a firm of chartered accountants from the panel maintained by the Comptroller and Auditor-General of India, appointed annually; a firm with a partner who was a Council member in the last four years is barred.
How this article reads the Act
This article follows the Act as printed by the Institute (as amended in 2011), read with the 2022 Amendment Act to the extent brought into force by S.O. 2184(E) dated 10 May 2022. Section 51 of that Act amends section 16: clause (ii) is in force, clause (i) (the new section 16(1)) is not. Section 52, which substitutes section 18(5), is in force. Later amendments and notifications should be checked.
Section 16: officers and employees
Section 16(1): in force and enacted but not in force
The text in force today is the 2006 text. The 2022 text was enacted by section 51(i) of Act 12 of 2022 but, as per S.O. 2184(E) dated 10 May 2022, not brought into force. A later commencement notification should be checked.
| In force (2006 text) | Enacted in 2022, not in force | |
|---|---|---|
| Opening | For the efficient performance of its duties, the Council shall: | For the efficient performance of its duties, the Council shall appoint: |
| Secretary | (a) appoint a Secretary of the Council to perform such duties as may be prescribed | (a) a Secretary, who will carry out the administrative functions of the Institute as its Chief Executive Officer |
| Discipline | (b) appoint a Director (Discipline) to perform such functions as assigned under the Act and the rules and regulations | (b) a Director (Discipline) and Joint Directors (Discipline) not below the rank of Deputy Secretary of the Institute |
| Chief executive | (c) designate an officer of the Council or the Institute to carry out the administrative functions of the Institute as its chief executive | (no separate clause; the Secretary is Chief Executive Officer) |
| Central Government role | None stated | Proviso: no appointment, re-appointment or termination of a Director (Discipline) or Joint Director (Discipline) has effect without the previous approval of the Central Government |
Until a notification brings the 2022 text into force, the in-force text is the operative law.
Section 16(2): the Council may also
- (a) appoint such other officers and employees to the Council and the Institute as it considers necessary;
- (b) require and take security for the due performance of duties from the Secretary or any other officer or employee;
- (c) as substituted in 2022 (in force): "prescribe the manner of appointment, powers, duties and functions of the Secretary and other officers and employees, their salaries, fees, allowances and other terms and conditions of service". The 2006 text said only "prescribe the salaries, fees, allowances ... and their terms and conditions of service";
- (d) with the previous sanction of the Central Government, fix the allowances of the President, Vice-President and other members of the Council and of its Committees.
Section 16(3)
The Secretary may participate in meetings of the Council but is not entitled to vote.
Section 17: committees of the Council
Section 17(1). The Council constitutes from among its members the following Standing Committees: (i) an Executive Committee; (ii) a Finance Committee ("Disciplinary" was replaced by "Finance" in 2006); and (iii) an Examination Committee. Section 2(1)(iaaa), inserted in 2022, defines a "Standing Committee" as one constituted under section 17(1).
Section 17(2). The Council may also form a Training and Educational Facilities Committee and other Committees from among its members as it deems necessary to carry out the Act.
Section 17(3). Each Standing Committee consists of the President and Vice-President ex officio and a minimum of three and maximum of five members elected by the Council from among its members.
Section 17(4) and (5) are printed as omitted.
Section 17(6). A Committee formed under sub-section (2) may, with the Council's sanction, co-opt other members of the Institute, not exceeding one-third of its total membership. A co-opted member exercises all rights of a Committee member.
Section 17(7). The President chairs every Committee of which he is a member; in his absence the Vice-President does if he is a member.
Section 17(8). The Standing Committees and other Committees exercise such functions and are subject to such conditions as may be prescribed.
Section 18: finances of the Council
Section 18(1). A fund is established under the management and control of the Council. All moneys received by the Council are paid into it, and all expenses and liabilities properly incurred by the Council are met from it.
Section 18(2). The Council may invest money standing to the credit of the fund in any Government security or any other security approved by the Central Government.
Section 18(3). The Council keeps proper accounts of the fund, distinguishing capital from revenue, in the prescribed manner.
Section 18(4). The Council prepares, in the prescribed manner, and approves before the start of the financial year an annual financial statement (the budget) of all anticipated revenues and proposed expenditure for the coming year.
Section 18(5), as substituted in 2022 (in force). The annual accounts are prepared in the prescribed manner and are subject to audit by a firm of chartered accountants appointed annually by the Council from the panel of auditors maintained by the Comptroller and Auditor-General of India. There are three provisos:
- A firm is not eligible if any of its partners is or has been a member of the Council during the last four years.
- If it is brought to the Council's notice that the accounts do not represent a true and fair view of its finances, the Council may itself cause a special audit.
- If that information is sent by the Central Government, the Council may, wherever appropriate, cause a special audit or take other action it considers necessary and furnish an action taken report to the Central Government.
Before 2022 the audit was by "a chartered accountant in practice" appointed annually; the bar covered a Council member, a person who had been a member in the last four years, or a person in partnership with such a member.
Section 18(5A) and (5B). At the end of each year the Council circulates the audited accounts to its members at least fifteen days in advance and considers and approves them in a special meeting. It then publishes in the Gazette of India, not later than 30 September of the next year, the audited accounts and the Council's Report as approved, and forwards copies to the Central Government and all members.
Section 18(6). The Council may borrow from a scheduled bank (as defined in the Reserve Bank of India Act, 1934) or from the Central Government: (a) money for capital liabilities on the security of the fund or other assets; or (b) temporary loans or overdrafts to meet current liabilities pending receipt of income.
A practical example
Shah and Associates, a chartered accountancy firm, is on the CAG panel. One partner, Mohan Shah, was a Council member three years ago. Under the first proviso to section 18(5) the firm is not eligible to be appointed auditor, even if the other partners were never on the Council. If the Central Government writes to the Council that its accounts do not show a true and fair view, the Council may order a special audit and must report back.
A body that deals with audit appointments, or a firm checking its eligibility, can use books of accounts compliance support to review the accounts and the appointment steps.
The same rule for chartered accountants
See Sections 16 and 17 of the Chartered Accountants Act, 1949 and Section 18. Here, the Council's accounts are audited by a firm of chartered accountants from the CAG panel.
Need help with accounts and audit compliance?
If your organisation keeps a fund, budget and audited accounts and needs to confirm who may audit it, our books of accounts compliance team can help you set the process out against a statute like section 18.
Key takeaways
- The 2022 text of section 16(1) is enacted but not in force; the 2006 text applies.
- Section 16(2)(c), as substituted in 2022, is in force and adds the manner of appointment, powers, duties and functions.
- Three Standing Committees: Executive, Finance and Examination.
- Council accounts are audited by a CAG-panel firm of chartered accountants; a firm with a partner who was a Council member in the last four years is barred.
- Audited accounts go to members 15 days ahead and are published in the Gazette by 30 September.
Read next
- Sections 15 to 15B: functions of the Council and the Institute
- Sections 19 and 20: Register of members and removal of names
- Section 21: the Disciplinary Directorate
Disclaimer: Based on the Cost and Works Accountants Act, 1959 (now the Cost Accountants Act, 1959) as printed by the Institute of Cost Accountants of India (as amended in 2011), read with the Chartered Accountants, the Cost and Works Accountants and the Company Secretaries (Amendment) Act, 2022 to the extent brought into force by S.O. 2184(E) dated 10 May 2022, as consulted on 3 October 2026. Regulations, rules, later amendments and commencement notifications should be checked. This article is general information, not legal advice; check the official text before acting.