Big Four affiliates catch the poll fever again, line up for ICAI posts
Mumbai, Oct 20, 2024
Synopsis
After a break, partners from Big Four affiliates are engaging in ICAI elections due to a more assertive ICAI, changing audit rules, and recent disciplinary actions. Key candidates include PwC's Abdul Majeed and Deloitte's Nandkishore Hegde. The elections aim to bolster their representation amid growing NFRA influence and stricter international networking guidelines.
Partners from Big Four affiliate firms are returning to elections at the Institute of Chartered Accountants of India after a hiatus, seeking stronger representation as they navigate a more assertive ICAI, new audit rules that could affect their assurance work and recent disciplinary actions like fines on affiliates and ban on certain partners, all of which have raised concerns in the top companies.
PwC's Abdul Majeed is seeking election for the South region, SR Batliboi & Co's Sanjeev Singhal is contesting again from the North, Deloitte Haskins & Sells' Nandkishore Hegde is running for a seat from the West, and Rakesh Shah is vying for the Western Regional Council. The central council consists of 32 members, along with members from the regional councils representing the 5 regions. The elections are scheduled for December 6-7.
The Big Four audit partners had steered clear of elections in recent years because the role demanded significant time and commitment from elected partners, which negatively impacted their client work and billings. According to a senior audit professional who has previously run for these elections, the partners were also frustrated by the limited impact of internal politics. The firms now believe increased representation will give them a stronger voice in the council on key professional matters.
In recent months, the ICAI has taken a more proactive stance, particularly in response to the National Financial Reporting Authority's increasing influence over the profession. The institute's disciplinary committee has enforced strict bans and heavy fines on firms that engaged in activities with global network entities that are not regulated in India. These activities included paying referral fees and using their names for publicity, all of which violate the guidelines of the Chartered Accountants Act, as per the institute.
Recently, the ICAI urged the NFRA to "pause" the revision of a key auditing standard, SA 600, which governs the conduct of group audits in India - a move that would have been beneficial for the Big Four firms. Moreover, the top firms are growing increasingly apprehensive about ICAI's international networking guidelines, given that the institute's draft aims to grant more access to the firms' non-audit work and requires more detailed information on the functioning of global networks. "We felt we needed a voice in the council. There has been a slew of actions against the firms, and we felt that our side wasn't heard. All Big Four affiliate firms have 100% Indian partnerships, so I don't understand the global versus India logic," said a Big Four auditor.
The election is taking place amid a visible standoff between the NFRA and the ICAI over issues like SA 600. In the latest development, the NFRA declared that the revised Standards of Quality Management issued by the ICAI last week were legally void.
"The ICAI's role is a significant question, particularly given the growing perception of the NFRA as the primary regulator for the profession's practicing members. The key question for the incoming central and regional councils is: What relevance will the councils have going forward in disciplinary and regulatory matters?" said MGB partner Jeenendra Bhandari.
[The Economic Times]
