Faced with a tricky situation of taking a call on opening up of accounting services to foreign firms, the CA Institute has decided to seek a month’s time from the Government to firm up its views on the matter.
The audit profession regulator has now formed a group of its Central Council to go into the whole gamut of issues thrown up by a recent Corporate Affairs Ministry (MCA) letter, Devaraja Reddy, President, Institute of Chartered Accountants of India, told BusinessLine here.
Without getting into the specifics of the MCA letter, Reddy said that the CA Institute’s Central Council had on Wednesday discussed the letter in great detail, but could not arrive at a decision among its council members.
“So I have formed a group comprising some Central Council members who will go into the issue. In the meanwhile, we will approach MCA seeking a month’s time to arrive at a final decision,” Reddy added.
The MCA has, in a craftily worded letter, sought the institute’s views on whether the Government should legalise the entry of foreign firms into India for taking up accounting services. This letter has been sent ostensibly to help expand export of accountancy services from India, sources in the CA Institute said.
Reddy said the CA Institute’s central council is likely to next meet in mid-September and by then the Group will submit its views to the Central Council.
Diverse views Meanwhile, reacting to the MCA letter, G Ramaswamy, former CA Institute President, told this newspaper that “no foreign Chartered Accountant or firms, who are not members with the Indian CA Institute, should be allowed to practice in India directly”.
If they are allowed direct entry into India, then Indian CA firms should also be allowed direct entry into foreign markets through reciprocity arrangements, he said.
Allowing foreign CA firms and their chartered accountants to directly practice here will open up a “Pandora’s box” and affect corporate governance and disclosures in India, according to Ramaswamy
Amarjit Chopra, a Past President of CA Institute, said that there was no case to open the audit and accounting profession to foreign players.
“We have significant talent within the country and good Indian firms to take care of this work. In fact, the Indian Government —which is pushing for Make in India — should look to support home grown firms. We must follow China model and encourage growth of local firms,” Chopra said.
Manoj Phadnis, a Past President of CA Institute, said a “level-playing field” was necessary for Indian CA firms. He pointed out that visa restrictions could hamper the ability of Indian accounting professionals to move abroad even if the foreign country’s accounting body allowed it.