ICAI Council Meet To Take Up White Paper On Big Four

New Delhi, July 29: | Updated: Jul 30 2003, 05:30am hrs
The Institute of Chartered Accountants of India (ICAI) will take up the white paper on big four accounting firms for discussion in its next council meeting. ICAI has already set up a study group to look into the issues raised by the CA action committee in the white paper. The group is expected to submit its report after two weeks.

ICAI president R Bhupathy said the white paper will be discussed in the council meeting slated for next month. The study group will look only at issues related to level-playing field for Indian professionals. The specific issue of alleged violations by the big four related to undertaking audit services through surrogate arrangements will be dealt with by the council and is not the mandate of the study group. An important section of the profession has registered a complaint through the white paper and ICAI has to look into the complaint, he said.

The white paper had alleged that MNC accounting firms entered into audit services and certification with certain domestic CA firms in gross violations of regulations laid down by ICAI. Under section 25 of the CA Act, CA firms can provide audit services only as partnership firms and not as corporate entities. The study group is also examining whether this restriction should be amended, he said.

Meanwhile, the 110,000-member ICAI has decided to put the issue of rotation of auditors to a referendum. ICAI will also seek the view of members on appointment of joint auditors by companies. Amendments would have to be brought in to the Companies Act if companies are to be asked to appoint joint auditors. He said if the majority favoured joint auditors the institute would request the government to bring in amendments to the Companies Act.