Sunday, 17 April 2016

Audit Services by BIG4 needs to be checked to save SMP CA firms

Kind Attention!! Regarding the burning issues of our profession which need the urgent attention of the Council.

Our profession has definitely gone through a transformation that largely parallels the rapid expansion of the economy. It was in the last 15 years the growth of the profession went through on the footprints of Big 4. The only authority, i.e. The council of ICAI can only restrict them.
With due respect I would like to bring some important issues which need the kind attention of council on the issue that the working of Big 4 in India is not legal, according to the basic principle of law i.e. ” what cannot be done directly, that cannot be done in directly’ and same contention was given by the Bar Council of India for these Big 4 operations in India. These firms were hauled up for alleged practice of law with Bar Council of India claiming that they are carrying on unauthorized practice of law & contravenes section 29 of Advocates act which provides that only Indian Citizens who are enrolled with the state bar councils as advocate have the right to practice the profession of law in India and accordingly put ban on these Big 4 consultant firms to practice law in India. These auditing firms are circumventing laws while providing audit services in the country. They are using the permission granted for doing consultancy work but carrying out other services that they are not permitted to do. India does not allow FDI in the field of accounting, auditing, book keeping, taxation & Legal services.
Technically BIG4 cannot provide audit service so they collaborated with Indian Chartered Accountancy Firms  and doing audit services Indirectly in the Name of Such Indian Firms.  These firms employ Chartered Accountants and are rendering audit services contrary to the CA act and are engaged in unauthorised practice of audit & one of the senior partner of the Indian CA firm is either major holder or Board of Director of the master Flag. These big 4 have in a surrogate manner engaged in practice of audit also the Chartered Accountant of big 4 attend partners meeting of their network. These big 4 are involved in determining the business strategy to meet clients and cross refer work to each other and that there is a modus operandi between their international network. Indian firms registered in their flagship uses the logo & share common office space, address, etc. And only one statement come from big 4 that they maintain highest level of professional standards and do not contravene any provision of law.
My submission is that now the time has come where the council has to interfere on the operations of Big 4 in India otherwise it will be real blow for the SMP CHARTERED ACCOUNTANTS and soon their will be a day where majority of the CA firms which are looking for opportunities of organised sector will loose all their importance and all the firms will be working under the umbrella of Big 4 and than no Independence will be their, which will clearly violate the CA act and regulations. When we will be working on sub contract basis than that day will be the black day of our profession and for this we only will be responsible.
Sir, my humble request to react on it as now no representations are going to work in the days to come as we have already seen in extension of date of Tax Audit Report, thus my utter submission to make some kind of regulations and involve the network of Chartered Accountant branches in India to get the maximum inputs so as to arrive at the policy which will help SMP’s.
Sincere Regards,
CA.Rohit Ruwatia (Agarwal)
Chairman- Young Members Empowerment Committee
Regional Council Member, CIRC
(Disclaimer- Above views are personal view of Author)

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