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EY, a global professional services firm, is quite bullish about the prospects for its financial accounting advisory services in India.
This international firm now plans to substantially increase the headcount of its Financial Accounting Advisory Services (FAAS) team in India in next few years, Kenneth Marshall, a global assurance leader has said.
Considering the complexity and speed of the regulatory changes in India and other markets, the India FAAS headcount will be ramped up to 600 persons in next 4-5 years from 100 now, Marshall told Business Line here.
Marshall leads Ernst & Young LLP’s FAAS practice in the Americas and is also member of the Global FAAS leadership team, EY.
Application intensity
Although India has converged with International Financial Reporting Standards (IFRS), much would depend on the “rigour” with which these standards are applied in India, Marshall said.
“As US investors gains confidence on what is coming out of India because of the change in accounting standards and SOX like requirements (internal financial controls), you will see more capital flowing into India through the US capital markets”, Marshall said.
Marshall was responding to a query on whether he expects more Indian companies to be able to raise capital from the US on account of India’s move to converge with IFRS
Pankaj Chadha, FAAS leader for India, said lot of learning is required on part of Indian accountants.
It will take at least couple of years for India to come to level of “gold standard” in terms of its own financial reporting that will be unconditionally accepted by investors abroad, Chadha said.
Marshall said this is “not going to happen overnight”.
However, compared within BRICS, the confidence is more so on India among foreign investors when compared to other developing countries.
Marshall underscored the need for the capital market regulator (as Securities and Exchange Commission does in the US) to supervise financial reporting.
“If you don’t have a capital market regulator supervising financial reporting, you will always have an interpretation that is very narrow compared to broader, consistent application”.
In India, SEBI is not testing financial reporting, but looking at audit quality.
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