Status of Indian Chartered Accountants in today’s era
China is urging State Cos to drop Big Four Auditors on data risk and to bolster the local accounting industry.
Cos are asked to use local auditors only.
A bold move by China for the interest of the local accounting industry.
Whereas in India things are completely different which can be seen from the update that recently the government has enlisted public sector non-banking finance company IFCI and one of the big 4 consultancy firm to help streamline its ₹10,000 crore programme to promote electric vehicles. The move comes amid allegations that some electric two-wheeler makers had flouted rules while availing of subsidy benefits under the Faster Adoption and Manufacturing of Hybrid and Electric Vehicles Phase II (FAME-II) scheme.
The Ministry of Heavy Industries (MHI), which is overseeing the scheme, has hired IFCI as the project manager for the programme, people in the know said. The NBFC already manages 10 of the government's 14 production-linked incentives (PLI) schemes, including two overseen by the MHI. The FAME-II scheme was earlier being managed internally by the MHI.
IFCI will act as an interface between the applicant companies and the government and handle aspects like data management and calculating subsidies due. It has already created a similar framework for the PLI schemes for the automobile and auto component industry and advanced chemistry cells.
one of the big 4 has been brought in to audit the books of multiple companies alleged to be wrongfully claiming scheme benefits. Queries sent to the MHI, IFCI and EY India remained unanswered as of press time on Monday.
The issue pertains to multiple EV companies allegedly using imported parts in their vehicles despite stating otherwise to claim benefits under the Make-in-India focussed FAME-II scheme.
In India, big 4 firms are operating in a very interesting structure, let's understand how?
In India, Only a Chartered Accountant in practice, can perform audit functions.
Now, big 4 in India, to perform audit functions, associated with some Indian CA practicing firms.
So, basically, in the end, all the responsibility is on the Indian Practicing Chartered Accountant per se for the audits done by big 4 for a small amount of salary but the big revenue/profits goes to big 4.
Amazing scheme being at the play.
So, why isn't any Chartered Accountant in Jaipur not so big yet to challenge these ?
The reason is as follows:
These big 4 (earlier big 8) were started somewhere in the year 1850 during the industrial revolution in Europe. Since, it was the time when business started flourishing in Europe, they made big business too and expanded their operations in other countries as well during that time of Industrial Revolution and European slavery on other countries.
Now, India got independence in 1947 and ICAI got setup. India started producing CA Firms and Practicing Chartered Accountants in India but India was in a disastrous state and was not left with much due to loots of Europe during the British rule, so Indian CA Firms grew very slowly in India due to lack of business in India whereas, big 4 expanded their business more and more due to the advantages they gained in the last 100 years since industrial revolution.
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Then, India opened its gates for business and opportunities in 1991, NSE came to light and business started flourishing. Meanwhile, Indian CA Firms started flourishing too but then Big 4 too allowed to enter into India. India grew at a very fast pace but Indian CA Firms were not able to grow with the same pace because big 4 who already had significant advantage and resources were allowed to perform audit functions by way of associating with Indian CA Firms, that is to say big 4 allowed to employ Indian CA Firms and make profit/revenue from Indian Accounting and Auditing work.
Now, the question is, will ever a CA firm in Jaipur be able to become big enough to compete with these foreign firms ?
It is now next to impossible due to the big grave we ourselves have created by allowing the Big 4's who already gained and expanded by taking the opportunity of industrial revolution which India missed as we were the labour for that industrial revolution for the profit/revenue of the European countries and the same is happening today as well where Indian Practicing CA's and CA Firms along with Indian Chartered Accountants in general are working as a labour for the revenue/profit of big 4 that too from the work created by the business's of India. Further, in smaller cities such as CA in Jaipur or Chartered Accountant in Jaipur are facing more and more problems due to lack of business and awareness
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