Group on Vision 2024

for
Global Presence of Indian CA Firms

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Presentation Outline

 Constitution of the Group

 Broad Terms of Reference of the Group
 Key Findings of the online survey conducted for Capacity Building
and Global Presence of Indian Firms
 Recommendations of the Group to address various issues identified
in the survey
 Support required from the Institute level
 Support required from the Governmental level
 Proposed strategy for making Indian CA Firms Bigger, Competitive
and Global

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Constitution of the Group

The Group was originally constituted in July 2017 and was

reconstituted in 2018 for identifying implementable suggestions for
capacity building and global presence of Indian CA Firms

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Broad Terms of Reference of the Group

 To identify constraints/challenges in the development of bigger

Indian CA firms.
 To develop a strategy to address constraints/challenges in the
development of bigger Indian CA firms.
 To identify important areas wherein support from the Government is
required.
 To identify changes required in the Act and regulations for capacity
building of Indian CA firms.
 To promote the concept of merger/networking/corporate form of
practise amongst Indian CA firms.
 To study International practices that can be replicated for capacity
building of Indian CA firms.

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Key Findings of the online survey conducted for Capacity Building and
Global Presence of Indian Firms

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Key Findings of the online survey conducted for Capacity Building and
Global Presence of Indian Firms

 Out of total 343 respondents, only six respondents have informed

that their firms have international affiliation.

 168 respondents have informed that they have specialization in any

particular industry.

 119 respondents have informed that their firm is having experience of

working with listed clients in statutory or internal audit.

 133 respondents have informed that their firms have Indian

companies as clients who have branches or subsidiaries in India or
other countries.

 128 respondents have informed that their firm is having experience of

working with international clients.

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Key Findings of the online survey conducted for Capacity Building and
Global Presence of Indian Firms

 97 respondents have informed that their firm is having a sizeable

technical department churning out technical processes-like audit
methodology, audit programs, interpretation of new IFRS, tax
pronouncements, Companies Act etc.

 126 respondents have informed that their firm is having a Quality

Control Department wherein all audit reports are reviewed and
compliance of firms’ process and procedures is ensured.

 304 respondents have felt that the demand for profession is

increasing and therefore there is a need to extend area of
specialisation.

 286 respondents have felt that the clients expect expertise,

experience and efficiency from the firms and require professionals
having multi-locational deliverable capacity.

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Key Findings of the online survey conducted for Capacity Building and
Global Presence of Indian Firms

130 respondents have informed that their firm has entered or tried
going for Networking. The major reasons highlighted for not going
for networking are:

 Lack of opportunity
 Lack of clarity
 Too much paper work
 Stringent ICAI regulations
 Lack of awareness

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Key Findings of the online survey conducted for Capacity Building and
Global Presence of Indian Firms

72 respondents have informed that their firm has merged or attempted

for merger. The major constraints highlighted by the respondents
which have prevented from moving ahead with merger are:

 Conflict of interest
 Loss of independence, control
 Loss of identity and quality
 Fear of domination
 Confidentiality issues
 No major monetary benefits.

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Key Findings of the online survey conducted for Capacity Building and
Global Presence of Indian Firms

72 respondents have informed that their firm has merged or attempted

for merger. The major constraints highlighted by the respondents
which have prevented from moving ahead with merger are:

 Conflict of interest
 Loss of independence, control
 Loss of identity and quality
 Fear of domination
 Confidentiality issues
 No major monetary benefits.

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Key Findings of the online survey conducted for Capacity Building and
Global Presence of Indian Firms

 Majority of the respondents have felt that there is a need of revisiting

existing guidelines for Network/Merger of CA firms to facilitate or
promote Networking/Merger of CA firms.

 179 respondents have felt that the existing guidelines of formation of

website and advertisement as prescribed in the Code of
Ethics/Council Guidelines are restrictive and impacting the growth of
their firm.

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Recommendations of the Group to address issues identified

 Though the sample size of the survey is too small as compared to the
number of CA firms in India, however based on the suggestions
received from the practicing members and the deliberations at the
meeting of the Group; the support which the CA firms expect can be
broadly categorised as under:

 Support required from the Institute

 Support required from the Government

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 Support required from the
Institute

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Effective Implementation of Networking and Merger Guidelines

 Clarity on implementation of ICAI’s networking guidelines,

allowing networking of firms within India and
affiliation of Indian CAs with overseas accounting firms, with
a regulatory supervision. Networking guidelines must be revised to
facilitate and enable such thinking.
 Networking of small and medium sized firms needs to be encouraged
to result in consolidated strength, capacity and capability.
 Networks may be incentivized by the regulators, considering their
combined strength, capacity and capabilities, instead of individual/
isolated evaluation for bidding purpose.
 Clear guidelines and mechanism for affiliation of India CA Firms with
overseas accounting firms.
 Encourage merger of local firms to increase market concentration
with the goal of improving quality.
 Promoting limited liability partnership as form of ownership.

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Stringent website and advertisement guidelines

Liberalization of advertising and

marketing guidelines of the ICAI to
enable firms to advertise their
credentials and also to enable brand
building.

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Need to provide Technological Support
 Accounting & Auditing softwares should be
developed by the ICAI.
 IT training programmes should be organised by the
ICAI.
 Improvements need to be made to the level of
information technology (IT) used in accounting
firm’s internal management to ensure that small,
large and medium size accounting firms universally
utilize IT in financial reporting audit, internal control
audit and other relevant services.

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Need of developing Leadership and Managerial Skills

 To enter into tie ups with IIMs and reputed

management institutions for organising leadership
programmes for Indian Chartered Accountants.
 Implementation of enhanced training methodologies
and tools, considering the changes in the regulatory
environment and globalization.
 Encourage Indian Chartered Accountants to obtain
overseas professional qualifications

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Access to information and infrastructure

 To provide information about the overseas

jurisdiction, the local laws and regulation, the
accountancy profession in such jurisdiction,
professional opportunities for collaboration etc.
 Maintain close contact with the Indian Embassies,
local accountancy bodies and the ICAI Chapters in
such jurisdictions to obtain necessary information.
 Infrastructural support to motivate members to join
practice

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Developing Non Audit Services

ICAI should assist Indian firms in

developing non –audit services for the firms
such as strategic management, mergers &
acquisitions, due diligence, investment
decision and other consulting services to
diversify their services.

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Other important recommendations
 Enhancing professional ethics and professional competence of the
Chartered Accountants through strict disciplinary mechanism.
 Changes in the Act and regulations to Improve practicing
environment, including legal system, policy development and market
regulations of the accountancy profession.
 Create country wise help and knowledge centres which provide the
relevant business, economic, legal (economic laws), etc information.
Generate a data base where foreign firms are willing to collaborate
with Indian firms.
 Proactive approach like other professional Institute like ACCA and
ICAEW doing in this region. ICAI is still far behind in branding our
profession globally as compared to other professional Institutes.
 Need to ensure empowerment, sustenance and capacity building of
SMPs so that they continue providing services effectively to SMEs in
India.

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Support required from the
Governmental level

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Support required from the Government
 Special incentive schemes to be initiated for Indian firms to establish
foreign branches and representative offices to provide full range of
services to Indian companies having foreign operations.
 To consider and incentivize multi-disciplinary professional practices.
MCA needs to work with various regulators (e.g., Bar Council of
India, Institute of Actuaries of India, Institute of Company Secretaries
of India, Institute of Cost Accountants of India, etc.) to facilitate
setting up of multidisciplinary partnerships.
 The severe restrictions introduced vide the Companies Act, 2013 on
audit firms to provide advisory services needs to be relooked at.
 The principle of reciprocity should be followed and the interests of
Indian audit firms should be given due consideration while opening
audit sector. The Indian firms should be allowed enough time to scale
up first before opening up the audit sector on the basis of principle of
reciprocity.
 Liaison with overseas securities regulators so that Indian firms can
audit international listings.

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Proposed strategy for making Indian CA Firms Bigger,
Competitive and Global

 Irrespective of the size; Indian firms have aspirations to set up

offices overseas however requirements of different firms in this
respect would be different. Therefore it is proposed to categorise the
firms into two broad categories:-

 Firms who in keeping with their existing size and work profile have
aspirations to explore overseas opportunities including setting up offices
overseas.

 Firms who would like to follow the path of consolidation and merger before
opening up of offices in India and overseas.

 Organising small meetings/workshops of above classified firms with

an objective to identify their requirements from the Institute and
other stakeholders.

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The Institute of Chartered Accountants of India

Partner in Nation Building

Thank You

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