INSUBCONTINENT EXCLUSIVE:
The Institute of Chartered Accountants of India has issued notices to Indian arms of multinational auditing firms including Deloitte,
PricewaterhouseCoopers, EY, KPMG, Grant Thornton and BDO, seeking details of corporate structures, investments and revenue.
The body is
investigating whether these multinationals, their Indian arms and domestic affiliates are flouting foreign direct investment norms and other
A separate set of notices was issued to some Indian firms that are part of foreign networks such as Nexia, Kreston, Mazars, Baker Tilly and
total revenue, profitability, equity structure and even revenue per partner
ICAI also sought information from firms operating under international brand names, investments made by multinationals over the years and
holding structures.
The notices were issued about three months after the Supreme Court asked the government to constitute a committee to
look into the functioning of foreign auditing firms in India
of ICAI, declined to comment on the issue
Queries emailed to Deloitte, PwC, EY, KPMG, Grant Thornton and BDO did not elicit any response.
At the heart of the matter is the prolonged
rivalry between foreign and domestic audit firms, which intensified during the mandated audit rotation in 2017 and 2018
Domestic firms that audited some of the biggest Indian companies lost out to multinationals during audit rotation
Domestic firms claim they are at a disadvantage against the might of the multinationals
companies.
Foreign firms are not allowed to take auditing work in India directly
They typically have an affiliate firm for such purposes, which, domestic players alleges, is part of the foreign firm for all practical
domestic firm.
Foreign firms claim their domestic rivals have already missed the bus
When mandatory audit rotation came, they were least prepared to compete with bigger firms that have been investing in people and technology
a combined workforce of more than 160,000
overlook and penalise CAs, a move some say would cut the Institute of Chartered Accountants down to size after not apparently being able to
According to some, ICAI members deliberately take an anti-Big 4 stance during internal elections to secure votes from a majority of the
