Release to major audit firms on the problem of global network sharing

The Committee of Experts (WCC), established by the Ministry of Trade Affairs, gave full attention to major audit firms in the case of substitution practice in India.

In the 200-page report, the CoE observed that the phrase "multinational accounting firms (MFAs)" was abusive and that simply being part of a network and sharing the overall costs did not make the MAFs of these Indian network companies, as they are neither owned nor controlled by the international network / entity.

The Committee recommended amendments to the Chartered Accountants Act (CA) and its Regulations to strengthen the auditing profession. He said in his recommendation that, in order to increase the competitiveness of Indian audit firms, collaborations with global networks of auditors should be allowed and therefore recommends changes to the laws governing such collaborations.

The Committee adds that Indian auditing firms, which are members of international networks, established as partnerships or limited liability companies in accordance with Indian law and all their partners, are members of the Indian Audit Firms. 39; ICAI, do not violate the requirement of reciprocity provided for in Section 29 of the CA Act.

Accountants from other jurisdictions, who do not allow Indian certification authorities to practice, are also allowed to practice in India.

With regard to the funds received by the Indian subsidiary of foreign audit firms, the committee states that the funds received are in the form of: grants and not of capital, and that this receipt of funds does not violate not FEMA. He also observes that there are currently no restrictions on foreign investment in audit and consulting services.

The committee also recommended giving audit firms more leeway in providing non-audit services, relaxing advertising standards for CAs, and so on.

. In response to the committee's recommendations, Vishesh C Chandiok, CEO of Grant Thornton India LLP, said that if implemented as planned, the recommendations of the Center of Excellence would improve the quality of the audit, the financial reports and facilitate the conduct of business in India. 19659002] "The activation of the independent regulator NFRA, the formation of multidisciplinary partnerships, the activation of global brands for auditing, including marketing and business promotion, the transparency of service fees not related to auditing, are all steps aligned with the direction that the progressive countries of the world have already advanced, and the Council of Europe has very aptly suggested to India to do it " says Chandiok.