The Committee of Experts (COE), set up by the Ministry of Corporate Affairs, is disappointing to the audit firms of four in the case of swapping practices in India.
In a 200-page report, the SE noted that the term multinational accounting firms (MAF) is wrong and that as part of the network and the sharing of global costs of these Indian network companies, they can not provide the MAF since they are neither owned nor controlled by an international network / entity .
The Committee recommended amendments to the law and regulations of the certified auditor (CA) for further opening of the audit profession. In its recommendation, in its recommendation, it stated that, in order to increase the competitiveness of Indian audit firms, it should cooperate with global audit networks and, accordingly, recommend amendments to the laws governing such cooperation.
The Committee also states that Indian audit firms that are members of international networks that are established as partnerships or aliens in accordance with Indian laws and all their partners do not violate the requirement of reciprocity under Article 29 of the CA Law.
The reciprocity clause states that no authorized accountant from other jurisdictions that allow Indian CAs to exercise can also allow training in India.
Regarding the funds received by the Indian subsidiary of foreign audit firms, the Board says that the funds received are in the form of grants rather than capital, and that the receipt of funds is not in breach of FEMA. It also notes that currently there are no restrictions on foreign investment in audit and advisory services.
The Committee recommended that audit firms provide more opportunities for the provision of non-audit services, the release of advertising standards for CA, etc.
Responding to committee recommendations, Vishesh C Chandiok, Executive Director, Grant Thornton India LLP, said that the recommendations of the COE will improve the quality of audits, accounting reporting and the Ease of Business process in India, if proposed.
"The activation of an independent NFRA regulator, the creation of multidisciplinary partnerships, the activation of a global brand for auditing, including the marketing and promotion of business, the transparency of commissions for non-assertive services are all steps that are aligned with the progressive countries in the world have already been postponed and the COE is very correct suggested that India should do too, "says Chandiok.