Rise of the Indian accounting firms? Tweet12 Jan 2018
With the banning of PwC news this week and the new FDI policy providing an opportunity for Indian auditing firms to move up, does it signal the rise of an indian auditing firm to the top?
- PM Modi wants 4 Indian accounting firms in world’s Big 8 by 2022
Referring to the ‘Big 4’ - a term used for the world’s four biggest audit firms - the Prime Minister said there are so many accounting firms in India but none of them has managed to find a place among the top global players.
“People talk of the Big 4 accounting firms. Sadly, there is no Indian firm there. By 2022, let us have a Big 8, where 4 firms are Indian,” Modi said while addressing the CAs on the Foundation Day of the ICAI (Institute of Chartered Accountants in India).
- As part of the new FDI policy, overseas auditors will have to undertake joint audit if an international investor insists on audit by a global firm - Big 4 audit firms face checks under liberalised FDI policy
This marks a major shift in India’s FDI regime, which was earlier silent on the issue and resulted in a situation where the shareholders’ agreement between a foreign investor and its Indian partner contained a clause specifying audit by Big Four firms such as KPMG, Ernst & Young, Deloitte or PricewaterhouseCoopers or Indian firms that are part of their network. The clause has been inserted to prevent this kind of an arrangement and the belief is that one global firm will not agree to a joint audit with an international rival and this will open the doors for standalone Indian firms which have been complaining of being left out. The foreign firms control a majority of the audit work in listed entities as well as large Indian companies, causing a lot of heartburn.
- Current auditors of the US-listed indian companies
|EROS||Grant Thornton India LLP|
|AZRE||Ernst & Young|
|YTRA||Ernst & Young|
|VEDL||S. R. Batliboi & Co.|
|VDTH||Khandelwal Jain & Co.|
|SIFY||ASA & Associates LLP|
- And finally a Good presentation on Quora about this topic