Kind Attention!! Regarding the burning issues of our profession which need the urgent attention of the Council.
Our profession has definitely gone through a transformation that largely parallels the rapid expansion of the economy. It was in the last 15 years the growth of the profession went through on the footprints of Big 4. The only authority, i.e. The council of ICAI can only restrict them.
With due respect I would like to bring some important issues which need the kind attention of council on the issue that the working of Big 4 in India is not legal, according to the basic principle of law i.e. ” what cannot be done directly, that cannot be done in directly’ and same contention was given by the Bar Council of India for these Big 4 operations in India. These firms were hauled up for alleged practice of law with Bar Council of India claiming that they are carrying on unauthorized practice of law & contravenes section 29 of Advocates act which provides that only Indian Citizens who are enrolled with the state bar councils as advocate have the right to practice the profession of law in India and accordingly put ban on these Big 4 consultant firms to practice law in India. These auditing firms are circumventing laws while providing audit services in the country. They are using the permission granted for doing consultancy work but carrying out other services that they are not permitted to do. India does not allow FDI in the field of accounting, auditing, book keeping, taxation & Legal services.
Technically BIG4 cannot provide audit service so they collaborated with Indian Chartered Accountancy Firms and doing audit services Indirectly in the Name of Such Indian Firms. These firms employ Chartered Accountants and are rendering audit services contrary to the CA act and are engaged in unauthorised practice of audit & one of the senior partner of the Indian CA firm is either major holder or Board of Director of the master Flag. These big 4 have in a surrogate manner engaged in practice of audit also the Chartered Accountant of big 4 attend partners meeting of their network. These big 4 are involved in determining the business strategy to meet clients and cross refer work to each other and that there is a modus operandi between their international network. Indian firms registered in their flagship uses the logo & share common office space, address, etc. And only one statement come from big 4 that they maintain highest level of professional standards and do not contravene any provision of law.
My submission is that now the time has come where the council has to interfere on the operations of Big 4 in India otherwise it will be real blow for the SMP CHARTERED ACCOUNTANTS and soon their will be a day where majority of the CA firms which are looking for opportunities of organised sector will loose all their importance and all the firms will be working under the umbrella of Big 4 and than no Independence will be their, which will clearly violate the CA act and regulations. When we will be working on sub contract basis than that day will be the black day of our profession and for this we only will be responsible.
Sir, my humble request to react on it as now no representations are going to work in the days to come as we have already seen in extension of date of Tax Audit Report, thus my utter submission to make some kind of regulations and involve the network of Chartered Accountant branches in India to get the maximum inputs so as to arrive at the policy which will help SMP’s.
Sincere Regards,
CA.Rohit Ruwatia (Agarwal)
Chairman- Young Members Empowerment Committee
Regional Council Member, CIRC
(Disclaimer- Above views are personal view of Author)
Author Bio
This practice has been continuing for some time now. The Big ones collaborate with leading Indian CA firms and include them as ‘member firms’ to circumvent the prohibition on foreign firms doing audit and assurance services in India. These foreign firms seek audit assignments as an international firm and then sign the balance sheet as an Indian firm. The brand name, logo, email ids, office addresses, stationery, visiting cards of the employees etc, all are in the name of the foreign firm.However the audit report bears the name of the Indian member firm.
This practice is not hidden from the ICAI. Inspite of this, some prominent members on various bodies/committees of ICAI and regional Councils are from such multinational firms. Prominent speakers from such foreign firms are invited by ICAI and regional councils on different
forums.
When one’s membership is cancelled for petty non compliance such as late payment of membership fee, such a blatant flouting of such fundamental law by collaboration of Indian and foreign firms should surelyinvite much stricter implications. The need is a strict and swift action from ICAI. However, only a hope of such action remains.
hey author… I neither agree nor disagree with your article.. however your article is very vague and it does not clearly indicate why a Big 4 Firm should not conduct audit services… which laws are they violating?? also can you throw some light on the modus operandi you are talking about? being in this profession I will appreciate if you can clearly articulate with the help of relevant sections / clauses etc of the relevant Acts, Guidelines, etc. the exact reason why the Council should prohibit Big 4 to provide audit services.. please explain clearly with facts, figures, names and factual examples of violation by the Big 4…. I am happy to serve for the well-being of this profession. Let’s please have some constructive criticism, if any.
Agreed with your points. We should fight against Big4 to retain our Indian CA profession.
block invoicing of big4 for such services, disallow them from tax audit point also.
I fully agree with the views & suggestions of Shri CA Rohit Ruwatia Aggrawal & request the Authorities of ICAI to take immediate steps to implement the suggestions of Shri CA Rohit Ruwatia Aggrawal, after following necessary procedures.I further request the authorities that a number of CA Firms of Category IV could not get Bank audit assignments (yr 2015-16) despite the seniority of 5 to 6 years of professional standing for no fault of theirs and therefore the ICAI may kindly appeal to RBI or concerned authorities to up grade the category of Firms into Category I.II.III & IV mere on the basis of professional standing into category III or II as the case may be instead of simultaneously linking with Bank Audit experience, which will be a great solace to CA Firms of Category IV , who have not been allotted Bank Branch Audits for no fault of theirs ,despite 5 to 6 years of Professional standing.This will be a great relief to needy firms , at least looking to future prospects of the profession.
Now they are using Indian CA for Global shared service in which Indian CA will be working as back office .