ICAI Approves Draft Regulatory Framework for Global Tie Ups of CA Firms
The Institute of Chartered Accountants of India (ICAI) has approved an important draft rule. This rule will allow local chartered accountant firms to partner with their international peers and start businesses in India, as per ICAI president Charanjot Singh Nanda.
This initiative is meant to help local firms grow bigger, aligning with the government’s goal of building large homegrown accounting companies.
The CA firms that are already tied up with global accounting entities will need to register with the ICAI and comply with the rules. The body discussed it with the corporate affairs ministry before making the final draft. The draft will be released soon to invite comments and feedback from shareholders.
At present, there is no such framework for global tie-ups. In the past, firms with foreign tie-ups had to give some information to the ICAI by submitting a form. But this form was stopped four years ago because proper rules and a framework were sought to be designed.
According to the draft framework, if an accountancy firm has been created through a tie-up with a foreign company, then it must register with the ICAI and appoint a senior member or partner as a nodal officer to make sure all rules are followed
These firms will need to give their names, registration details, and any changes in constitution to the ICAI. They will also have to file their annual reports with the institute.
The ICAI has brought changes in its guidelines, allowing CA firms to merge up to 10 years in order to support accounting firms. However, earlier, this timeline was 5 years to separate if things do not work out.
