Injeti Srinivas added that the fair trade regulator, Competition Commission of India (CCI), should debate on this issue as it concerns the market.
Emphasising on the independence of chartered accountants (CAs) and auditors, ministry of corporate affairs (MCA) secretary Injeti Srinivas on Monday said time is ripe to deliberate on the excessive concentration and market dominance of the big four accounting firms. He added that the fair trade regulator, Competition Commission of India (CCI), should debate on this issue as it concerns the market.
He was referring to the top accounting and auditing firms. Generally, PwC, Deloitte, EY and KPMG are considered as the Big 4. “The time has come that there should be a debate on excessive concentration and market dominance of the Big 4 firms in the auditing space. There is a question of concentration and dominance, and I think CCI should look into this issue. I’m not saying that CCI do something about it, but it’s time we debate it,” Srinivas told FE.
Elaborating on his views, the secretary said this is a fundamental issue that is being debated globally. “In India, we have around 5,000 listed companies. There is a lot of concentration. A few companies account for bulk of the audits, maybe over 90%. I read somewhere that at the global level, the Big 4 account for more than 75% of the audits. There is this fundamental issue. Is there excessive concentration, is there lack of competition? Excessive concentration and lack of competition in a market economy is a matter of concern,” he explained.
He said excessive dominance needs to be checked and the industry must deliberate on it. How does the government and industry deal with this issue, Injeti enquired, adding that it is a challenge. “How do you deal with issues of concentration and market dominance is again a challenge. This issue can be considered by the CCI. Globally there have been debates on splitting big companies. So there are views on splitting companies. These are real issues, which we will have to look at,” he added.
Injeti also said for a CA to do justice to his or her job, it is pertinent that he/she is independent. The whole crux of the debate is independence.