KPMG sees big market in financial reporting standards
July, 12th 2008
From 2011, all companies in India will have to draw up their accounts in conformity with the International Financial Reporting Standards (IFRS). Migration from Indian GAAP to IFRS is emerging as big business opportunity for consultants.
KPMG for one sees huge potential for itself. According to Mr Russel Parera, Chief Executive Officer, KPMG India, many companies are approaching KPMG, asking the consultant to help them migrate to IFRS. Today, KPMG is working on 15 proposals, compared with nil last year.
Mr Parera told Business Line today that many companies wanted to prepare for the IFRS. They basically want to know what will be my numbers like under IFRS.
If companies accounts have to be IFRS-compliant by 2011, their accounts for the preceding year will also have to be IFRS-compliant so as to make comparison of results meaningful, he said.
KPMG is gearing up to seize the upcoming business opportunity. Many Indian professionals who have worked abroad are coming back to India and are training professionals here. KPMG will also be able to access the talent available with it internationally to assist Indian companies migrate to IFRS, Mr Parera said.
(Mr Parera was here in connection with the opening of a new office in Chennai. The office will help the firm further expand its operations and offer audit, tax and advisory services to various sectors in the South, he said. Currently KPMG employs over 3,000 in India and plans to raise this number to 5,000 to 2010, he said.)
The IFRS is an international effort to harmonise financial reporting globally. In India, the Institute of Chartered Accountants of India (ICAI) has said that all companies and banks should draw up their accounts under IFRS from 2011. To make this mandatory, of course, legislation (or regulation) would need to be suitably amended, but this is expected to be duly done.
Despite the fact that the deadline is fast approaching, not many companies are seized of the matter, according to Mr P Rajendra Kumar, Chairman, Southern India Regional Council of ICAI. He said that the institute has been trying to sensitise corporate India on the need to act quickly. Mr Kumar said that the accounting profession in India has sufficient bandwidth to help companies migrate to IFRS.