The Institute of Chartered Accountants of India (ICAI) has urged the government to ensure that Indian accounting firms get a level playing field in foreign countries, as the country is considering unrestricted practising rights to foreign firms.
Responding to a commerce ministry query on its position with regard to the accounting sector under the World Trade Organisation (WTO) regime, the countrys apex audit regulator called for a reciprocal arrangement with other countries to ensure that Indian firms get equal opportunities abroad.
What we seek is equal opportunities for domestic firms in other territories through removal of non-trade barriers, said an ICAI official. The regulator clarified that it is not averse to competition of any kind, he said, requesting anonymity.
The regulators views assumes significance due to the fact that the government is considering to allow unrestricted access to multinational audit firms. Currently, foreign audit firms are allowed to practice only in areas such as management consulting and advisory.
Allowing foreign firms to do audit here will require several changes in the countrys policy framework.
The commerce ministry, ministry of corporate affairs and the Reserve Bank of India are in favour of opening up the sector to foreign participation, a move that is expected to ensure greater accountability of multinational firms operating in India. MNC firms, even though not allowed to conduct statutory audits in India, enter into tie-ups with domestic firms to conduct audit of local firms.
The government is likely to take the regulators views seriously while framing the new policy structure governing the audit profession.
Domestic firms should be given unqualified access in countries that have their firms practising in India, said an official in the ministry of corporate affairs.
While agreements with countries such as New Zealand, Canada and UAE are under consideration, the ministry recently allowed Indian chartered accountants to offer their professional services in Ireland under a reciprocal arrangement.