Faced with stiff competition from the multinational accounting and auditing firms, mainly the Big Four, the Institute of Chartered Accountants of India (ICAI) is planning to organise the Indian auditing and accounting sector.

The apex accounting regulator is contemplating capacity building and consolidating smaller firms to give competition to the multinational firms like KPMG, Deloitte, Ernst & Young and PricewaterhouseCoopers.

For the purpose, the institute is calling a meeting of bigger Indian firms for discussing the consolidation strategy.

We would be calling a meeting of bigger domestic firms and will ask them what role they can play in building small and medium practitioners of the country.

We want to know how can they help in capacity building...Big multinational firms have sophisticated tool kits, research and resources...Indian firms need to come together and consolidate, ICAI president Amarjit Chopra told The Indian Express.

The institute has already held a meeting with the Big Fours and asked them not to take over small but strong local auditing firms as it would kill competition.

The ICAI has however said the foreign firms can enter into networking agreements with local firms. The sources say that the multinational firms have already agreed to this.

Chopra also said a meeting would be organised with the past presidents of the institute on the issues concerning surrogate practices by the multinational auditing and accounting firms in the country.

We are planning to organise a meeting of the past presidents too to discuss issues concerning bigger firms where we will seek resolution of the matter regarding surrogate practices. We want to seek their views on the subject, he added.

The ICAI is trying hard to regulate the functioning of multinational accounting firms in the country. However, allegedly, these companies practice under surrogate names and hence do not fall under the purview of the ICAI directly. ICAI can act only against its members or the firms registered with it in case of any malpractice or defaults.

The Big Fours have come under severe criticism after the Satyam fraud where PricewaterhouseCoopers was involved in auditing the accounts of the IT firm. Under fire from several quarters, the big fours have also agreed to share certain information with the institute.