Government May Relax Rules for CAs to Advertise their Firm
The Central Government is expected to relax the advertisement rules under the Chartered Accountant Act, 1949, for CAs. As per reports, this move aims to help chartered accountants in promoting their services and receiving more assignments.
As per a report, the Prime Minister’s Office scheduled a meeting in September to discuss the regulatory changes and the steps aimed at allowing the domestic audit and consultancy firms to expand and compete with the Big Four on a global level.
The current regulations restrict the CAs from advertising their services. Under the Chartered Accountants Act, 1949, CAs and their firms can advertise their services, subject to some conditions. They are allowed to advertise by “write-ups“, but there is a restriction on the font size and the use of photographs, along with some other limitations.
The restriction on advertising rules aims to maintain professional standards and client trust. The principle is that a CA should earn based on their professional reputation and the quality of their work, not on their advertising skills. This also prevents the CAs from making any misleading claims that could harm the client and damage the reputation of the CA Profession.
As per reports, the President of the Institute of Chartered Accountants of India (ICAI) has shared that ICAI is planning to give suggestions to the Ministry of Corporate Affairs to ease the advertisement rules for the CAs. He said that the institute is making changes to its Code of Ethics for the CAs and their firms. Under this revision, the guidelines for the advertisement of services will be revised along with the accounting websites and network firms. He said that the draft will be released within a few days to invite comments from the stakeholders.
The proposed changes aim to offer more flexibility and visibility to Indian firms so that they can compete with the top global companies and gain a share of the $240 billion international auditing and consulting market.
Before the amendment of the Chartered Accountants Act in 2006, it completely restricted the professionals and their firms from advertising their services. However, after the amendments were made in 2006, the act allows limited advertisements through write-ups and imposes a few conditions. For this, ICAI also released “Advertisement Guidelines” mentioning the Do’s and Don’ts for the members.
As per the ICAI’s president, ICAI has also presented its suggestions to the Ministry of Corporate Affairs to strengthen the growth of Indian audit and consultancy firms that can compete with the Big Four. The Audit segment of India is currently dominated by the Big Four, which include EY, Deloitte, KPMG, and PwC.
To solve this, ICAI has brought up many initiatives that include the amendment of the Merger and Demerger of CA Firms Guidelines, 2024 and the Aggregation of LLPs Guidelines, 2024, to facilitate the expansion of domestic firms.
