ICAI puts forth Fresh Domestic Networking Model for Growth of Indian CA Firms

ICAI Releases Exposure Draft on Proposed New Model of Networking-LLP Firm Network Model for Public Comments
By Manu Sharma - On May 29, 2024 3:19 pm - 2 mins read
ICAI - CA - Indian CA Firms - Domestic Networking Model - Networking Model - Taxscan

The Institute of Chartered Accountants of India (ICAI) has released an Exposure Draft on the proposed LLP Firm Network Model, a new approach intended to revitalize the networking framework for Chartered Accountant (CA) firms in India.

The Committee for Aggregation of CA Firms (CACAF), constituted for the year 2024-25, has undertaken the task of revising various guidelines pertinent to CA firms, with a particular focus on the Guidelines for Networking of Indian CA Firms 2021.

Introduced in 2005, the Networking Guidelines underwent revisions in 2011 and 2021. Despite these updates, the anticipated momentum and benefits for CA firms have remained elusive. The primary obstacles identified include:

  1. Non-Recognition of the Alliance/Network – CA firms often faced challenges due to the lack of formal recognition by regulators.
  1. Independence Restrictions – Constraints related to maintaining auditor independence have hindered effective networking.

Read More: Limitation on Number of Audits per Year by CA: Supreme Court upholds Operation of ICAI Rule w.e.f. April 1, 2024

  1. Internal Frictions – Growing firms have struggled with internal conflicts as they expand.
  1. Lack of Understanding – Many firms are not fully aware of the advantages and drawbacks of networking.
  1. Absence of a Unified Platform – There is no comprehensive platform for collaboration.

To address these challenges, the CACAF proposed the LLP Firm Network Model, known as Approach III. This model aims to harness the collective strengths of incoming LLP firms as partners, allowing them the flexibility to practice independently while also achieving recognition from regulators for their combined capabilities and extensive geographic reach.

This initiative is envisioned as an important step towards establishing top-tier Indian CA firms.

Read Also: Set Up a Big-Four like Indian Firm: Finance Minister tells ICAI

The proposed model is designed to foster improved coordination among constituent firms, ensuring consistent audit quality across India. By leveraging the combined resources and strengths, CA firms can achieve significant synergies, positioning them to better serve their clients and expand their influence.

Interested parties can access the Exposure Draft through the following link: Exposure Draft on LLP Firm Network Model.

ICAI also welcomes Feedbacks on the Exposure Draft until June 5, 2024.

Comments can be submitted via the following online form:

Submit Comments at https://forms.gle/FLYviiZZut2iw7ZEA or emailed to cacaf@icai.in. Constructive comments should provide a clear rationale and specific suggestions where applicable.

A QR code is also available for quick access to the feedback submission page.

The ICAI and the CACAF look forward to the public’s insights and suggestions to refine and enhance the LLP Firm Network Model, aiming to create a better framework that will drive the growth and efficiency of Chartered Accountants’ firms across the nation.

Support our journalism by subscribing to Taxscan premium. Follow us on Telegram for quick updates

Topics

taxscan-loader