In a move that could obviate the need for surrogate practice by international audit firms, the government may soon ease norms to allow them freer play.

"It's our problem, why we do not let them practice here, so we just cannot blame them. We should let them sign and then make them accountable for what they do," minister of corporate affairs Salman Khursheed told DNA.

"It is a two-way thing. They may be taking advantage of a loophole, but why are we giving them a loophole? We cannot live in isolation; we have to look at things objectively as we even want Indian audit firms to operate globally," he said.

Under the current norms, only audit firms registered with the Institute of Chartered Accountants of India (ICAI) are allowed to provide full-time audit services. International audit firms cannot operate directly and are only allowed to provide certain consultancy services.

Many international audit firms, however, have a significant presence in the country and have been performing statutory audits by partnering local firms --- a model known as 'surrogate practice'.

In May, ICAI had issued notices to accountancy firms who may have been practising surrogate auditing.

"We have got ICAI's report on surrogate practice. They have sent notices to 94 people and they have got responses from quite a few. We have also talked directly to the big four (PricewaterhouseCoopers, Deloitte, Ernst & Young and KPMG). Now, a solution has to be found.

I can say that currently the situation is unsatisfactory, when people function in the name of some other company and the actual firm is not responsible and yet we know that they have presence here," he said.