Latest Expert Exchange Queries
sitemapHome | Registration | Job Portal for CA's | Expert Exchange | Currency Converter | Post Matrimonial Ads | Post Property Ads
 
 
News shortcuts: From the Courts | News Headlines | VAT (Value Added Tax) | Service Tax | Sales Tax | Placements & Empanelment | Various Acts & Rules | Latest Circulars | New Forms | Forex | Auditing | Direct Tax | Customs and Excise | ICAI | Corporate Law | Markets | Students | General | Indirect Tax | Mergers and Acquisitions | Continuing Prof. Edu. | Budget Extravaganza | Transfer Pricing
 
 
 
 
Popular Search: ACCOUNTING STANDARD :: VAT RATES :: VAT Audit :: form 3cd :: TDS :: due date for vat payment :: Central Excise rule to resale the machines to a new company :: TAX RATES - GOODS TAXABLE @ 4% :: list of goods taxed at 4% :: ICAI offer Get Windows 7,Office 2010 in Rs.799 Taxes :: cpt :: articles on VAT and GST in India :: ARTICLES ON INPUT TAX CREDIT IN VAT :: ACCOUNTING STANDARDS :: empanelment
 
 
News Headlines »
 Seven things you must do before 31st March
 Income Tax saving investments: Top 5 options available for high-income individuals
 How to use zero tax rule on long term capital gains on stocks
 GST Returns - Furnishing details of inward supplies
 5 ways to maximise you income tax return
 Income-tax (2nd Amendment) Rules, 2017
 Soon, Faster PAN, An App For Filing Tax Returns
 Changes in income tax return filing process
 New Income Tax Rates And Deductions Applicable From April 1, 2017
 Tax and transparencya
 No decision yet on imposing tax on cash transactions

Rotating auditor rule to impact companies
May, 01st 2014

Come April 2017, there is likely to be chaos in corporate India. Not because of bad economic conditions or some policy paralysis of the next government, but because of the newly introduced Companies Act. According to the Section 139 of the Companies Act, all companies (with public deposits of above Rs 50 crore) will have to rotate their auditors after 10 years.

In the case of companies which already have an auditor for more than 10 years from the day the new Companies Act kicked in, the law gives them a cooling-off period of three years to change the auditor. It is believed that a long-term relationship leads to coziness between the company and its auditor which creates a potential conflict of interest. A number of Indian firms have had strong relationships with a particular audit firm for over 50 years. That will now come to an end.

The law has come as both a threat and an opportunity for auditors. Bharat Dhawan, managing director of Mazars, says that auditing firms like his will be gainers. He says that most large corporates - Reliance Industries, Tata Group, M&M -currently have one of the four big four firms - EY, KPMG, Deloitte and PricewaterhouseCoopers-as auditors.

"Deloitte and PwC have maximum of listed companies today. I think Deloitte will be a loser to that extent," he adds.
Moving away from the big four, there are only two global auditing firms present in India: Mazars and Grant Thornton. Industry experts say that two things that matters in the auditing space is cost and attention. Mazars says that there's a 30-40 per cent cost difference between them and the big four. Plus, its partners give more attention to each client.

Once a company becomes big, the board of directors forces them to go for one of the big four auditing firms. "But that is changing. We have a lot of private equity investors coming to us and saying that promoters don't want big four because they are too expensive. And they don't give them time," says Dhawan adding that it's target is not Reliance Industries but companies that have an annual turnover of Rs 50 to Rs 7,000 crore. "There are 7,000 listed companies in India out of which active would be 3,000. There may be at least 2,000 which I may target. Actually, if you leave aside the top 100 companies, the rest will be our targets," he says.

 
 
Home | About Us | Terms and Conditions | Contact Us
Copyright 2017 CAinINDIA All Right Reserved.
Designed and Developed by Binarysoft Technologies Pvt. Ltd.
Binarysoft Technologies - Our Portfolio

Transfer Pricing | International Taxation | Business Consulting | Corporate Compliance and Consulting | Assurance and Risk Advisory | Indirect Taxes | Direct Taxes | Transaction Advisory | Regular Compliance and Reporting | Tax Assessments | International Taxation Advisory | Capital Structuring | Withholding tax advisory | Expatriate Tax Reporting | Litigation | Badges | Club Badges | Seals | Military Insignias | Emblems | Family Crest | Software Development India | Software Development Company | SEO Company | Web Application Development | MLM Software | MLM Solutions