The Centre has taken a crucial step towards creation of global-sized network of Indian CA firms on the lines of Big Four or Big Five in the auditing and accounting world.
The Corporate Affairs Ministry (MCA), represented by its Secretary, Manoj Govil, discussed with the CA Institute the contours of a roadmap for realising this ambition, sources said.
At an interactive meeting between Govil and the CA Institute’s top brass in the capital, the challenges faced by Indian CA firms in “aggregation of firms” were also discussed, sources said.
Government wants Indian firms to grow big, but how to grow big is a major challenge given several constraints, they added.
The interactive session between MCA and ICAI members assumes significance as the Prime Minister Narendra Modi had in his first term in July 2017 — during his address at the Chartered Accountants Day event — called for creating four big Indian accounting firms that are counted among the world’s Big 8.
Currently, there are about 96,000 CA firms in India with about 1.6 lakh practising chartered accountants. Of these, about 75,000 firms are proprietorships.
ICAI Central Council meet
Indications are now that the upcoming ICAI Central Council meeting on July 2-3 will take up the much awaited international networking guidelines to enable domestic firms to spread their footprints abroad, sources said.
The framing of international networking guidelines is part of terms of reference of ICAI committee on ‘Aggregation of CA firms’, ICAI President Ranjeet Kumar Agarwal had said earlier this year.
“One of the challenge for Indian CA firms is technology funding. Most firms don’t have funding support to invest big in technology. I had raised the issue with the MCA Secretary at the meeting,” Amarjit Chopra, former President of ICAI told businessline.
Chopra also said that the issue of government tenders for audit mandates being tailor-made for the Big Four or Big Five global audit firms was also raised by him at the meeting.
The other important issue discussed at the meeting was that CAG, RBI and SEBI are not recognising the networks created by the domestic audit firms; this was brought to the attention of the MCA Secretary.
Govil had at the interactive meeting emphasised the government’s commitment to foster a conducive environment for the growth of the profession.
The interactive session concluded with a collective resolve to work towards creating an enabling framework that supports the aggregation and expansion of CA firms.