Rules of Overseas Chartered Accountant Firms

India’s Ministry of Corporate Affairs informed the Upper House today that Indian chartered accountant (CA) firms are regulated by the Institute of Chartered Accountants of India (ICAI) in terms of provisions of the Chartered Accountants Act (1949) and the rules and regulations framed thereunder.

What that means is that no CA firm, whether Indian or foreign, can function in the area of audit/assurance services in India without first being registered with the ICAI. It is, though, possible that several “multinational accounting firms” may be operating in the country in the fields of audit/assurance services through Indian audit firms/ members who are registered with the ICAI.

Action has already been initiated against the statutory auditors of Satyam Computer Services Limited, namely Price Waterhouse, Bangalore and its members. The names of CA Pulavarthi Siva Prasad, CA Chintapatla Ravindernath and CA Srinivas Talluri have been permanently removed from the Register of Members and also a fine of Rs. 5 lakh has been imposed on each. The decision on awarding punishment to CA S. Goplakrishnan, and CA V.S. Prabhakar Gupta is likely to be taken by the Disciplinary Committee of the ICAI at its next meeting.

The Minister was replying to a written question whether it is a fact that Indian CA firms are being regulated by the Institute of Chartered Accountants of India, but the foreign CA firms practicing in India are not regulated by any regulatory body.

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