ICAI yet to decide on action against MNC accounting cos: Govt
August, 17th 2012
Accounting regulator ICAI has reported alleged violation of various laws by multinational accounting firms having arrangements with domestic companies, but is yet to take any action against them.
In a written reply to Lok Sabha, Minister of State for Corporate Affairs RPN Singh Thursday said the ICAI sent a report on 'Operation of Multinational Network Accounting Firms in India' after examining documents received from 171 firms of Chartered Accountants believed to have tie ups with foreign firms and entities.
The report mentioned "instances of violation of Chartered Accountants Act, 1949, the CA Regulation, 1988, guidelines issues by the Council of ICAI and Companies Act, 1956".
"The Council of the Institute of Chartered Accountants of India (ICAI) is yet to decide on the future course of action on the recommendations contained in the Report on the operating arrangement between certain Indian CA firms and multi-national accounting firms," he said.
However, Singh added, that no specific complaint has been brought to the notice of the Ministry as yet by the ICAI and if anything came up, "appropriate action" would be taken.
Replying to a query on whether multi-national accounting firms were allowed to operate in India, the Singh said as per India's initial offer made in 2005 at WTO level, "setting up of an office by a foreign entity in India was totally out of bounds" for accounting, auditing, book keeping services and legal consultancy services" and "the same position continues".
However, he said, "subject to applicable laws/sectoral rules and regulations, FDI is permitted up to 100 percent on automatic route in these sectors"