ICAI releases revised Guidelines for Networking of Indian CA firms 2021

ICAI releases revised Guidelines for Networking of Indian CA firms 2021 The Institute of Chartere Accountants of India (ICAI) is came out with a revi…

Reetu

Mar 23, 2021

Last update on Mar 23, 2021

ICAI releases revised Guidelines for Networking of Indian CA firms 2021 The Institute of Chartere Accountants of India (ICAI) is came out with a revised set of networking guidelines that will provide a stronger framework for pooling of resources. The revised guidelines once in place will boost the smaller audit firms. "The need of the hour is for domestic firms to come together. The (revised) guidelines will also help Indian firms to become global players,"

Some Highlights of Guidelines are:-

The practising CA firms in India have generally done well. The common features noticed with Indian CA profession are–

Majority CA firms are small sized firms.
A large number of firms have confined practice to audit and taxation.
Many firms have audits allotted through the ICAI-PDC empanelment process.
Members have attachment with their firm name and do not want to go for Merger or Network due to fear of loss of identity.
When client grows bigger, they tend to switch over to a larger firm with an expectation that a larger firm will better cater to the diversified and growing needs.
Firms that have ventured into newer areas of practice have found success and have been able to scale up.
Firms that have developed expertise or specialisation have prospered.
Firms that have networked and formed a larger structure have by and large scaled up.

Technology is gradually replacing human intervention. Competition from other professionals has been a perennial challenge and will continue to be so in areas other than audit. Merger of public sector banks and consequent reduction in number of branches, increase of tax audit limits, etc are also factors to be taken note of. The Council of ICAI, with a view to ensuring small and medium practitioners (SMPs) to stay relevant with the times, has enabled the CA firms to:

form LLPs so as to overcome the limitation of number of partners;
merge so as to form a larger structure, with a provision to demerge within 5 years, if merger is not meeting the objective;
establish multidisciplinary firms, working together with other professionals such as Cost Accountants, Company Secretaries, Advocates, Engineers, Architects and Actuaries (the modalities for same are presently being developed and will be notified in due course);
form Network with other firm(s).

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Reetu

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Reetu is a Content Writer with 4+ years of experience in GST, Income Tax, Finance, Company Law, Education and Career Related Content. She is a B.COM (Honrs.) Graduate.