Acting on a petition Indian audit firms sent to prime minister Narendra Modi recently the corporate affairs ministry has constituted an expert group to delve into the issues related to the operations of audit firms In the country,
The elected expert group members former competition commission of India. (RBI) deputy governor NS Vishwanathan will study the operating structures of multinational audit firms implementation of audit rotation and use of restrictive covenants by global investors. They have two months to engage with relevant stakeholders and make suitable recommendations to the government. It’s a positive order for Indian audit firms.
The expert group has the right balance of experts to review the burning issues faced by Indian audit firms arising from monopoly of multinational audit firms in India. CEO at auditing firms KS Aiyar & Co. The principles of anti competitive measures as per law need to be considered in every service including right now, audit concentration in India is a grave systemic risk.
Though the Indian firms audit slightly more than 60% of ET 500 companies, there has been a perceptible shift towards the multinational firms, especially amongst larger Indian companies. But now the companies Act 2013 mandated audit rotation threatens to speed up Client exodus.
In July representatives of the top 20 Indian audit firms met in Mumbai to discuss ways to combat the increasing influence of multinational firms. Post that meeting Aiyar on behalf of the firms had drafted a petition to the prime minister pointing out hegemony of the big four auditing multinationals and alleging that they engaged In illegal actions.