Ernst & young (EY) is perhaps the best-known audit firm around the world. Yet, it can't audit in India. Its rival is PricewaterhouseCoopers (PwC), which operates in India as PriceWaterhouse (PW). Similarly, though Deloitte Haskins & Sells (DH & S) turned into Deloitte Touche Tohmatsu the world over, it remains so here.

The oddities follow from the hostility to the Big Four from the local Indian chartered accountant (CA) firms. The profession is regulated and managed by the Institute of Chartered Accountants of India (ICAI), an organisation that is owned and run by 1.53 lakh Indian accountants, most of whom see the Big Four as bread-snatchers, not unlike in the rest of the world.

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These accountants elect a Council of 32 from amongst themselves that governs the institute, which has been traditionally hostile to the Big Four. The Council has a disciplinary committee that tries and punishes wayward accountants. The ICAI does little more than fighting elections on a Big-Four-are-bad agenda, says a top shot at one of the Big Four.

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The ICAI has refused licences to the Big Four since India closed its doors to foreign accountants at the WTO (then GATT) in the 1980s. PW got its licence before this happened. So did DH & S. EY and KPMG, however, don't have licences. Still, they beat the restriction and audit in India through undeclared tie-ups and affiliations with local Indian CAs. For the record they are management consultants. The non-Big Four resent the less-thanhonest entries. They ask for business as EY, but sign the audits as S.R. Batliboi, says outgoing ICAI President Ved Jain.

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About 80 per cent of the elected 32 reject or approve proposals on one criterion: Implications on the Big Four, worries a non-Big Four council member. Whether a proposal is good for the profession is not their concern; it should not benefit the Big Four in any possible way, he shrugs.

The angst of the non-Big Four is understandable. Forget the global companies, we're steadily losing even our age-old Indian clients, says a three-time Council member. Here's how: On entering India, a global company invariably opts to be audited by the Indian off-shoot of its global Big Four auditor. Then, Indian companies expanding globally choose the Big Four to gain acceptability and status. And most agreements such as for private equity investments or mergers & acquisitions, joint ventures, etc that Indian companies are increasingly entering into define auditors as: One of the Big Four.

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We're swimming against the tide all the time, rues the Council member. Why doesn't any one realise that the big being beautiful doesn't make the small ugly? Jain, however, denies the hostility.

Another big grudge of the smaller audit firms is the Big Four's unmatchable advertising spends. The ICAI regulates advertising by auditors, just like lawyers and other professionals are barred from promoting themselves or seeking business.

Again, the Big Four beat the rules with surrogate promotion using their consulting badges. Their incomparable skill, global experience and network fan the frustration, too. But it would seem like it's advantage Big Four. The bulk of the freshmen graduating from the ICAI aspire for careers in the Big Four. Also, more and more small firms would like to become big so that they can sell out to the Big Four or be signed up by them for partnerships at handsome rates.

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The ICAI's strategy now is to use PwC's Satyam link as a pressure point to get the WTO to open the doors for Indian accountants to overseas markets in return for admitting the Big Four and other smaller foreign audit firms. That will be a fair deal and help curb hostilities.