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Legal decks have been cleared for audit firms to transform themselves into multidisciplinary partnerships (MDPs), with the CA Institute making changes to regulations to usher in this new concept in the accounting and auditing ecosystem.
Nearly 15 years after the CA Institute moved the Central government for allowing MDPs, the Corporate Affairs Ministry has now given its assent, following which the world’s second largest accounting body has specified a new form for this new structure.
With this move, a CA firm can rope in cost accountants, company secretaries, actuaries and even lawyers (the Bar Council has to approve this) as partners, become multi-disciplinary firm and offer a variety of services — financial auditing, secretarial audit and cost audit.
MBAs won’t be allowed
However, MBAs will not be allowed as partners as the CA Act specifically prohibits it.
Commenting on the development, Debashis Mitra, Vice-President of the Institute of Chartered Accountants of India (ICAI), told BusinessLine that he sees no difficulties in the long run in implementation of this concept.
“The ICAI has been pushing for this MDP concept for several years now. This will help small/ medium-size practitioners to grow.
“It is not about only big firms getting bigger, it is even about small and medium ones getting bigger,” Mitra said.
Networking guidelines
The MDP framework will not enable Indian audit firms go global, immediately. For that, “we need to revisit our networking guidelines and work is on, on that front. We want the audit profession to first get used to MDP idea, said Mitra.
Mitra said the need of the hour is to for CA firms to build capacity as stakeholders also prefer all services under one roof .
Former ICAI president G Ramaswamy said this will enhance the capability of CA firms by including company secretaries and cost accountants. “It’s a capacity building measure for accounting firms”, he said.
S N Ananthasubramanian, former President of the Institute of Company Secretaries of India, said this tectonic shift will throw up untold opportunities as well as unseen challenges for both professionals and the institutions that govern them. Nonetheless, this will create demand for professionals of repute, he added.
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