The Public Accountants Default Act was enacted on 22nd March, 1850 for avoiding loss to public that which is incurred due to negligence of public accountants. The Act provides for total avoidance of loss due to default of Public Accountant which also is the Preamble of the Act.
Public Accountant under section 3 of the Act is defined as a person who is entrusted with responsibility over money and other property of value which shall include also land, the person shall be entrusted with these under official capacity and shall also include persons who under official capacity holds responsibility under the Central Government or State Government and are invested with receipt of money, valuable securities and land belonging to governments appointing these officials.
Section 2 of the Act provides for furnishing of sureties by Public Accountants which may be in real or in kind. The authority appointing the sureties and security shall make rules to this respect from time to time. In case the Public Accountant causes any default, the head of office shall proceed against the public accountant and his sureties for losses incurred. In case the Public Accountant has wrongfully proceeded against any person the arrears of loss incurred to such person shall be recovered from the Public accountant itself.
The Act was enacted with a view to lay accountability to Public Accountants for losses incurred by them to public at large due to negligence on their part.
by Vibhuti Nakta.