The Institute of Chartered Accountants of India (ICAI) approved a new regulatory framework allowing Indian chartered accountant firms to formally partner with foreign accounting networks operating within India.
This policy change hopes to enhance the international competitiveness of Indian firms and is in alignment with the government’s goal of developing home-grown accounting champions that are recognized globally.
Key Features of the ICAI’s Global Collaboration Framework
The newly approved draft gives all serious global collaborations robust and prescribed procedural roadmaps.
1. Mandatory Registration with the ICAI: All Indian CA firms which enter global collaborations with other international institutions will register their partnerships with ICAI.
2. Nodal Officer Obligation: All Indian CA firms which enter international collaborations will appoint a senior partner as a nodal officer to ensure the firm is compliant with ICAI regulations.
3. Annual disclosures of information: Firms that are partnered with other international firms must make disclosures including firm names, registration number, shareholding structure, publication of financial statements (i.e. balance sheets, profits and losses).
4. Ethical and Compliance standards: Indian CA firms will be totally required to observe ICAI’s ethical and compliance standards even if they are forming international collaborations.
Statements from ICAI leadership
ICAI President Charanjot Singh Nanda indicated that the apex council has approved draft regulations and stakeholder consultation will formally take place shortly. The framework is expected to be notified officially in July 2025, after public comments have been considered.
“This is a significant milestone in taking Indian CA firms to the global tier. Through international networks, our professionals will have access to a bigger toolkit and operate to world class standards,” said Nanda.
Why Does This Move Matter for Indian CA Firms?
Previously, no formal policy was in place to regulate partnerships of any form between Indian and foreign audit or advisory firms. This meant that firms were forming collaborative arrangements with foreign firms that were inconsistent and could not be measured for compliance with other forms of independence and objectivity standards. This new framework provides structure and credibility, providing the necessary support for Indian accounting firms to increase demand for their services from a cross-border context by attracting international clients, engaging foreign expertise in international assignments, and scaling their accounting operations internationally.
This also provides an environment for Indian accounting firms to compete with global firms on a more organized, transparent and ethical basis – which is positive for creating investor confidence and for promoting professional standards of practice in the profession as a whole.
The framework from the ICAI is significant in opening new doors for Indian CA firms to form legitimate international partnerships in regulated cross-border arrangements. It will increase flexibility for the growth of firms in India and their ability to work with foreign clients, and further foster international collaboration with other firms internationally while building India’s presence in global financial services.
Read More: Every Time Judiciary Cannot Wear The Hat Of Policy Makers In Guise Of Judicial Review: Supreme Court
