While the legal profession in India is still weighing the pros and cons of opening up to foreign competition, chartered accountants have gone ahead and taken the plunge. The Institute of Chartered Accountants of India (ICAI) has signed an agreement with the Institute of Chartered Accountants in England and Wales (ICAEW), allowing both countries to recognise the qualification of CAs from the other country.
The move will allow CAs in India to practise in the United Kingdom, and permit British CAs to set up shop in India. The ICAI is also in talks with countries like Canada and Australia for signing similar agreements. The agreement signed between UK and India will temporarily grant qualified CAs of both countries a level-playing field for practicing in the field of taxation and consultancy.
However, they will, at present, not be allowed to audit the accounts of companies in the host country. It would be allowed after the matter is taken up for approval with UKs Financial Reporting Council (FRC). Once an approval is granted by the professional oversight board of FRC UKs independent regulator for corporate reporting and governance Indian CAs will be provided a platform at par with their UK compatriots to audit the accounts of corporate entities there.
According to ICAI president, Ved Jain, The agreement stands on the principles of reciprocity. Once the ICAEW gets approval of audit rights for Indian CAs, we will lend similar professional openings for their CAs also. In India, ICAI is not required to seek approval of government or an independent regulator for taking such decisions.
On the adaptability of the services of foreign professionals within India Inc, Mr Jain says that the professionals working here will be guided under strict professional standards maintained by the ICAI, and hence there will be no lapse in service delivery.
Observing that India and UK have strong trade interest, ICAEW deputy-president Martin Hagen said that the initiative will enable closer working linkages between the two countries. The MoU will require CAs of both countries undergo training programmes on each others accounting practices.