The Hindu Business Line : Remove barriers on foreign accounting firms: IFAC

THE International Federation of Accountants (IFAC), a global organisation for the accountancy profession, has decided to press for the removal of all barriers for establishment of foreign professional accountancy firms in India.

However, the Institute of Chartered Accountants of India (ICAI), which is the regulator of the chartered accountancy profession in the country, continued to flag the issue of level-playing field for the domestic firms. The Institute held that it was important that this issue be addressed before looking at granting of freedom of establishment to foreign accounting firms in the country.

At a joint press conference with ICAI here, the IFAC President, Mr Graham Ward, told reporters that "we no more want to see barriers for carrying out work in India" and that there should be freedom of establishment of professional services firms in the country.

Mr Ward said that there were issues such as restrictions on the name of the firms that need to be sorted out before foreign firms could freely carry out professional work here. Mr Ian Ball, Chief Executive of the global organisation, accompanied the IFAC President.

Making his presentation, the ICAI President, Mr Kamlesh Vikamsey, said that a level-playing field was necessary for Indian accountants in domestic firms.

"We are for an open regime, but there has to be level-playing field for domestic accountants," he said.

Mr Vikamsey pointed out that concepts such as multi-disciplinary professional firms and limited liability partnerships were yet to be introduced as law of the land.

The ICAI had in the recent years petitioned the Government that foreign firms have been allowed entry without any reciprocal arrangement for domestic accountants and Indian firms in other countries.

As a consequence, Indian accountants continue to face professional and non-professional barriers in rendering services in those countries.

It had also pointed out to the Government that accounting bodies in other countries were not forthcoming on the issue of removal of the barriers that exist for movement of accounting services and accountants from India since accounting firms of those countries have been allowed to operate and are already operating in India.

The Institute had also highlighted that the operation of certain foreign firms were in circumvention of the Indian law as they provided all kinds of services that may not be covered by the licence given by the Reserve Bank of India and/or permitted by the Indian law.

The ICAI had also raised the issue of adoption of circuitous means like engagement in audit work through `surrogate' firms.

During his three-day visit, the IFAC President is expected to meet the Commerce and Industry Minister, Mr Kamal Nath; the Minister of State for Company Affairs (independent charge), Mr Prem Chand Gupta; the RBI Governor, Dr Y.V.Reddy; the SEBI Chairman, Mr G.N.Bajpai; and the Comptroller and Auditor General of India, Mr V.N. Kaul.

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