Accounting regulator ICAI has accused state and central governments,
and PSUs, of deliberately favouring chartered accountant companies
having affiliations with multinational audit firms.
"In certain cases, public sector undertakings, the government
departments, central and state governments advertise for various
professional services, wherein the basic eligibility requirement tends
to favour multinational network accounting firms or other corporate
entities," ICAI said.
These observations are part of the ICAI's 'Report on Operation of
Multinational Network Accounting Firms (MAF) in India, which was
submitted to the Ministry of Corporate Affairs.
The big four audit firms which operate in India through associates
include, PricewaterhouseCoopers, KPMG, Ernst&Young, and Deloitte.
It further said, "It has also been observed that auditors have been
replaced by Indian CA firms networked with MAFs apparently for no
professional reasons".
In certain cases, ICAI said, joint venture agreements, MoUs, foreign
collaborations agreements, shareholders agreements, private equity
participations and side letters are exchanged between parties
mandating appointment of auditors as prescribed by international
parent.
In the same report, the Institute of Chartered Accountants of India
(ICAI) has also accused the multinational accounting companies of
violating the CA Act and asked for joint action by agencies, including
the Reserve Bank India and the Corporate Affairs Ministry, to enforce
compliance.
"The [ICAI] Council shall request the Ministry of Corporate Affairs,
Reserve Bank of India and other relevant Ministries/Departments of
Government of India to take appropriate action [to enforce compliance
of law]," ICAI said in its report.
The ICAI report, however, did not name multinational audit firms
operating in India.
The report is significant in the wake of involvement of PwC affiliates
in auditing the books of Satyam Computer Services (now Mahindra
Satyam), which was embroiled in a Rs 14,000-crore accounting fraud.
The ICAI report observed that some of the Indian audit companies have
licence agreements to use international brand names, under which the
affiliates have to align their policies with the network, which in
turn influences decisions and functioning of the domestic firm.
The ICAI also noted that many CA firms have not furnished complete
information or have "masked certain portions" about their arrangements
with multinational accounting firms and action would be taken against
them for the same
and PSUs, of deliberately favouring chartered accountant companies
having affiliations with multinational audit firms.
"In certain cases, public sector undertakings, the government
departments, central and state governments advertise for various
professional services, wherein the basic eligibility requirement tends
to favour multinational network accounting firms or other corporate
entities," ICAI said.
These observations are part of the ICAI's 'Report on Operation of
Multinational Network Accounting Firms (MAF) in India, which was
submitted to the Ministry of Corporate Affairs.
The big four audit firms which operate in India through associates
include, PricewaterhouseCoopers, KPMG, Ernst&Young, and Deloitte.
It further said, "It has also been observed that auditors have been
replaced by Indian CA firms networked with MAFs apparently for no
professional reasons".
In certain cases, ICAI said, joint venture agreements, MoUs, foreign
collaborations agreements, shareholders agreements, private equity
participations and side letters are exchanged between parties
mandating appointment of auditors as prescribed by international
parent.
In the same report, the Institute of Chartered Accountants of India
(ICAI) has also accused the multinational accounting companies of
violating the CA Act and asked for joint action by agencies, including
the Reserve Bank India and the Corporate Affairs Ministry, to enforce
compliance.
"The [ICAI] Council shall request the Ministry of Corporate Affairs,
Reserve Bank of India and other relevant Ministries/Departments of
Government of India to take appropriate action [to enforce compliance
of law]," ICAI said in its report.
The ICAI report, however, did not name multinational audit firms
operating in India.
The report is significant in the wake of involvement of PwC affiliates
in auditing the books of Satyam Computer Services (now Mahindra
Satyam), which was embroiled in a Rs 14,000-crore accounting fraud.
The ICAI report observed that some of the Indian audit companies have
licence agreements to use international brand names, under which the
affiliates have to align their policies with the network, which in
turn influences decisions and functioning of the domestic firm.
The ICAI also noted that many CA firms have not furnished complete
information or have "masked certain portions" about their arrangements
with multinational accounting firms and action would be taken against
them for the same
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