The Chartered Accountants Act 1949 was enacted to regulate the profession of Chartered Accountants in India. The Act extents to whole of India. The Act consists of thirty three sections and two schedules. According to this Act the Institute of Chartered Accountants of India was constituted to regulate, register and educate Chartered Accountants in India. The Act was amended in 2006 which enables the ICAI members to make multi-disciplinary firm and can also give multi disciplinary services. Again the Act was amended in 2011 and inserts new definitions which helps ICAI members to enjoy the benefits of Limited Liability Partnership Act of 2008.

According to Sec. 2 of the Act ‘chartered accountant’ means a person who is a member of the institute and institute means the Institute of Chartered Accountants constituted under this Act. As per Sec. 7 of the Act every member in the institute may use the designation of Chartered Accountant. Sec.8 of the Act says that persons with disabilities shall not become the member of the institute. Certain disabilities contained in the section are unsoundness of mind, minority, persons who has been convicted by a competent court, persons who has been removed from the membership of the institute on being  inquiry to have been guilty of professional or other misconduct. Sec. 9 of the Act constitutes a Council of the Institute for managing the affairs of the institute and for discharge of functions held under the Act and Sec. 12 of the Act clearly speaks about the provisions for president and vice president. Sec. 14 of the Act sets the duration of the council as three years from the first meeting.

Sec 15 of the Act speaks about the functions of the council. This section was substituted by Sec.11 of Chartered Accountant (Amendment) Act 2006. As per this section duties of the council include approval of academic courses and their contents, conducting examination for enrolment, prescribing qualification for entry in Register etc. Sec 15 A of the Act provides for imparting education by Universities on the subjects covered by the academic courses of the Institute. The said section was also inserted through 2006 Amendment of the Act. Sec. 16 of the Act deals with officers, employees, salary and allowances. This section was also substituted by Sec. 13 of 2006 Amendment of the Act. As per Sec. 17 of the At the council shall constitute two Standing Committees which was expanded to three according to 2006 Amendment. The committees are Executive Committee, Examination Committee and a Finance Committee which was inserted by the said Amendment. Sec. 18 of the Act deals with the finance of the council. Sec. 19 of the Act deals with the register. The council shall keep a Register of its members and it shall include their name, date of birth, qualification etc. The council has got authority to remove the names from the Register under Sec. 20 of the Act.

Chapter 5 of the Act deals with misconduct. Sec 21 of the Act provides for establishment of Disciplinary Directorate for misconduct. This section was substituted by Sec. 18 of 2006 Amendment. 21 A of the Act deals with Board of Discipline and 21 B of the Act deals with Disciplinary Committee. As per 21 C of the Act the Board of Discipline, the Disciplinary Committee and Disciplinary Director shall have the same powers of a civil court which is contained under Sec. 15 of the Civil Procedure Code 1908. Sec 22 A of the Act confers on the Central Government the authority to constitute an Appellate Authority. Sec. 22 of the Act deals with appeal to the Authority. Chapter 6 of the Act consists of only one section and that is Sec. 23 which provides for constituting Regional Council. Chapter 7 of the Act deals with penalties. Chapter 7 A of the Act advocates for Quality Review Board. The chapter itself was inserted by the 2006 Amendment of the Act. Sec 28 A of the Act provides for establishment of Quality Review Board. The functions of the board are to make recommendations to the council about the quality of service provided by the members of the Institute including audit services and to guide the members of the Institute to improve the quality of their service.

Almost all leading countries of 21st century recognized Chartered Accountants. Canadian Institute of Chartered Accountants, American Institute of Certified Public Accounts, Institute of Chartered Accounts in Wales and England, Singapore Institute of Chartered Accountants, New Zealand Institute of Chartered Accountants, South African Institute of Chartered Accountants are some of them.

When we discuss about the effectiveness of the Act we could reach a conclusion that to an extent the Act found its destination because today every firm or business chains have a Chartered Accountant. And also this profession is considered as a noble elite profession.