The Central government is likely to amend the laws regulating the chartered accountancy profession to relax existing restrictions on advertising by these professionals and their firms, The Economic Times reported.
Citing people familiar with the matter, the report states that the move aims to help chartered accountants (CAs) promote their services more effectively, secure new assignments, and support business growth.
Move to ease advertising restrictions
Under the Chartered Accountants Act, 1949, CAs and their firms are permitted to advertise in a restricted manner through “write-ups”, subject to limitations on the font size and the use of photographs, among other restrictions. The proposed amendment aims to enable the emergence of large domestic firms capable of competing with global players and capturing a share of the $240-billion international auditing and consultancy market.
ICAI to propose changes to the ministry
The president of the Institute of Chartered Accountants of India (ICAI) said that the apex auditing body plans to propose these amendments to the corporate affairs ministry to further relax advertising restrictions for its members.
Draft rules to be released soon
He also added that ICAI is considering revising its Code of Ethics for CAs and their firms, adding that this would include revising guidelines for advertisements and websites for accounting and network firms. The institute will also release a draft of these regulations in a day or two for stakeholder comments, he noted.
Ethical standards to stay intact
“The need for certain relaxations has been recognised in areas such as the mode of technology used (pull or push mode), event galleries, and font size, among others, and recommendations are being formulated accordingly,” the ICAI president said. He added that the revised guidelines, while maintaining ethical standards, would help improve the visibility of firms and their services.
First amendment in 2006
The Chartered Accountants Act, in its original form, did not allow professionals or firms to advertise. However, limited advertisements through write-ups were allowed, subject to conditions, after amendments were made to the Act in 2006.
Subsequently, ICAI also issued “Advertisement Guidelines” outlining various dos and don’ts for members. To encourage the growth of large domestic audit and consultancy firms that can rival the Big Four, he said the institute has presented its recommendations to the Ministry of Corporate Affairs.
ICAI pushes for larger domestic firms
The recommendations aim to promote consolidation and growth by simplifying regulatory processes and offering fiscal incentives. They also tend to focus on strengthening the operational capabilities of domestic networks of Indian CA firms and improving overall professional ease through streamlined compliance requirements, the ICAI president said.
Big Four dominate India’s audit market
The lack of large, domestic accounting firms has enabled the Big Four, to dominate the country’s audit landscape.
Guidelines to boost firm collaborations
He said that to address this issue, ICAI introduced several initiatives, including the revision of the Merger and Demerger of CA Firms Guidelines, 2024, and the Aggregation of LLPs Guidelines, 2024, aimed at helping domestic firms expand through collaboration. The institute is also developing a regulatory framework to facilitate partnerships between domestic firms and their international counterparts.
PMO reviews regulatory changes
According to a Times of India report, the Prime Minister’s Office (PMO) held a meeting in September to discuss regulatory changes and other measures aimed at enabling domestic audit and consultancy firms to scale up and compete with the Big Four globally.
Since 2017, Prime Minister Narendra Modi has advocated for the establishment of at least four large domestic firms that could rank among the world’s top eight.
