Big four watch out. The audit profession regulator, the Institute of Chartered Accountants of India (ICAI), plans to delve into some of the surrogate advertising practices of international firms with presence in India. In particular, awards given by them for entrepreneurial excellence and the promotions for such events are likely to come under the ICAI scanner, Mr Amarjit Chopra, new President of the CA institute, has said.
Currently, only partnership firms registered with the ICAI are allowed to undertake attest functions here. Some of the Indian partnership firms have tied up with the international entities to be part of their global network. The international firms have presence in India mainly through private companies, which undertake consulting and advisory activities.
So when these international organisations organise award functions on entrepreneurial excellence, the local audit firms associated with them also get some promotion for their audit capabilities, which goes against the interest of the smaller audit firms here.
“For certain people (in India), profession is not a profession. It is a business. An Indian firm is not allowed to give any form of ads. However, some one can come here and take up surrogate practices — give ads for entrepreneurial awards also. We are definitely going to look into those aspects,” Mr Chopra told Business Line, when asked whether one can look for some level playing field between small practice units and the firms that are part of the international network.
He felt that the Government also needed to look into such practices and take an appropriate view.
“All those firms that claim they are part of an international network are not willing to part with their agreements. You float a private limited company having directors who are partners in a firm and you take the internal audit and in the main firm, you do the statutory audit. If those are the best practices, then God save us.
“They document independence the most. As corporate governance cannot be achieved by a corporate governance report itself, independence cannot be achieved by mere documentation” .