Accounting regulator Institute of Chartered Accountants of India is arranging easy financing schemes for its members through public sector banks, as it looks to help domestic audit firms enhance infrastructure
and resource base to ward off competition from larger multinational rivals.
ICAI has already entered into an arrangement with state-owned Corporation Bank, which will grant loans at liberal terms to small and medium firms, said an official with the regulator. "Similar arrangements could also be considered depending on the response we get," he said, requesting anonymity. Indian audit firms face the threat of losing bulk of the lucrative consultancy work to competitors from Europe and China.
ICAI has also urged member firms to network among themselves and create larger entities through mergers and consolidations. Domestic firms are finding it difficult to scale up due to a paucity of funds. "Domestic firms should join hands for long-term prospects," said Amarjit Chopra, president of ICAI. He further said there was a need to review the networking rules so as to encourage mergers.
The regulator has also asked member firms to look into emerging areas of consulting and assurance services rather than depending solely on audit assignments from banks. Noting that 74% of chartered accountants in the country are working as proprietors (working in an independent capacity) depending on annual bank audit, the ICAI president, in a recent communication to all its members, has asked them to get into collaborations to form larger firms capable of competing with MNCs.
In accordance with WTO norms, India allows transnational firms to be in the field of management consulting, even though these entities enter into informal tie-ups with domestic firms to do statutory audit work in India.
ICAI has over 1.5 lakh registered chartered accountants. They either work independently or are engaged by audit firms. Foreign firms having presence in India include US-based Deloitte Touche Tohmatsu, UK-based PriceWaterhouse-Coopers, Dutch firm KPMG and UK-based Ernst & Young –– together called as the Big 4.
The MNC firms have global networks and a large resource base, both in terms of infrastructure and manpower. Lately, India has also seen the emergence of a large domestic firms, although large chunk of the audit professional in India still works independently.
ICAI has conveyed to these multinational entities not to take over small audit firms, a move it feels will come as a hurdle to create a greater number of large domestic audit firms. With the country set to embrace International Financial Reporting Standards, a lot of back office consultancy work is being generated. The regulator wants that the Indian firms create the necessary infrastructure including resource base to earn revenue through consultancy job.
The ministry of corporate affairs, which is the administrative department for the audit regulator, has asked the institute to promote setting up of larger domestic firms under the limited liability partnership (LLP) route.
[Source: The Economic Times]
--
warm regards,
CA. Rahul Bajaj
and resource base to ward off competition from larger multinational rivals.
ICAI has already entered into an arrangement with state-owned Corporation Bank, which will grant loans at liberal terms to small and medium firms, said an official with the regulator. "Similar arrangements could also be considered depending on the response we get," he said, requesting anonymity. Indian audit firms face the threat of losing bulk of the lucrative consultancy work to competitors from Europe and China.
ICAI has also urged member firms to network among themselves and create larger entities through mergers and consolidations. Domestic firms are finding it difficult to scale up due to a paucity of funds. "Domestic firms should join hands for long-term prospects," said Amarjit Chopra, president of ICAI. He further said there was a need to review the networking rules so as to encourage mergers.
The regulator has also asked member firms to look into emerging areas of consulting and assurance services rather than depending solely on audit assignments from banks. Noting that 74% of chartered accountants in the country are working as proprietors (working in an independent capacity) depending on annual bank audit, the ICAI president, in a recent communication to all its members, has asked them to get into collaborations to form larger firms capable of competing with MNCs.
In accordance with WTO norms, India allows transnational firms to be in the field of management consulting, even though these entities enter into informal tie-ups with domestic firms to do statutory audit work in India.
ICAI has over 1.5 lakh registered chartered accountants. They either work independently or are engaged by audit firms. Foreign firms having presence in India include US-based Deloitte Touche Tohmatsu, UK-based PriceWaterhouse-Coopers, Dutch firm KPMG and UK-based Ernst & Young –– together called as the Big 4.
The MNC firms have global networks and a large resource base, both in terms of infrastructure and manpower. Lately, India has also seen the emergence of a large domestic firms, although large chunk of the audit professional in India still works independently.
ICAI has conveyed to these multinational entities not to take over small audit firms, a move it feels will come as a hurdle to create a greater number of large domestic audit firms. With the country set to embrace International Financial Reporting Standards, a lot of back office consultancy work is being generated. The regulator wants that the Indian firms create the necessary infrastructure including resource base to earn revenue through consultancy job.
The ministry of corporate affairs, which is the administrative department for the audit regulator, has asked the institute to promote setting up of larger domestic firms under the limited liability partnership (LLP) route.
[Source: The Economic Times]
--
warm regards,
CA. Rahul Bajaj
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