The Hindu Business Line : Networking of CA firms

THE Institute of Chartered Accountants of India (ICAI) deserves kudos for its efforts to enable its members to meet the emerging challenges in the era of globalisation.

It had a comprehensive study conducted in 2004 on the measures needed to enhance the inherent strength and vitality of the chartered accountancy (CA) firms in tune with the exacting demands of the new economy.

The CAs of India, numbering some 1.25 lakh start off with a big advantage vis-a-vis their foreign counterparts: The examinations of the ICAI and the standards of performance and code of conduct prescribed by it are far more rigorous and stringent than in countries such as the US and the UK, and this gives the CAs of India an edge in professional ability and competence. In fact, in all my experience in various capacities, I have never come across a dull, dumb or dim CA.

But the CA firms are in danger of being swamped by multinational giants of distinctly lower quality but whose size and brand name give them tremendous clout.

They somehow make sure that their inclusion in any negotiation, collaboration or project is a tacit or open requirement for its acceptability and presumed credibility in the eyes of governments, financial institutions and business and industry abroad.

Of the 47,479 Indian CA firms, as many as 34,505 are proprietary, and of the remaining 12,974 partnership firms, those having more than 10 members number a measly 118, and those having four to 10 members are 2742. As many as 10,114 are small in size.

There is no way the CA firms can establish their supremacy that is their rightful due except by networking or even merging with firms of the same or similar category within or across States.

This will help pool their professional, financial, technical and logistic resources to enlarge the scope and scale of their operations to levels which would bear at least a respectable comparison with foreign CA firms.

Use of referral practice, engaging in corporatised consultancy services to the maximum extent and entering into partnerships with professionals in other fields will further increase their impact.

In Tamil Nadu, the Society of Auditiors has given a timely impetus to the campaign in these directions.

The ICAI should now ensure that it bears fruit in all the other States as well. National pride and just recognition of the calibre of Indian CA firms demand nothing less.

B. S. Raghavan