‘Regulations that tie the hands of audit firms need to go’

An inter-ministerial group led by the Prime Minister's Office (PMO) is reviewing India’s audit regulations with an aim to ease them. Grant Thornton Bharat CEO Vishesh Chandiok talks to Manu Kaushik about the progress of this initiative, and the regulatory changes required. Excerpts:

- Manu Kaushik

What are the things that India must do to achieve the target of creating homegrown peers of the Big Four?

For the first time, there is real momentum in this regard. It is not about enabling new small and medium enterprises (SMEs), but about creating 10-20 large (Indian) multidisciplinary partnership (MDP) firms in addition to the ones that are there today. If we don’t have the ecosystem to support local firms, then only the MNC firms will keep getting bigger. MDP is about having regulated and unregulated businesses under one umbrella.

The regulated businesses are restricted to be practised by only specific professionals — company secretaries, accountants, lawyers, etc. The unregulated businesses include consulting, mergers and aquisitions, etc. The idea is how do you create enterprises which are multidisciplinary.

In the regulated services, there are various rules that govern how entities should be structured. In practical terms, all these regulations have tied the hands of the firms. For a while, lets remove all these restrictions. Over time, as MDP practices evolve, we can look at bringing back some of those restrictions.

Doyou think it’s feasible to remove all restrictions for professional services?