Beyond the Big Four

The government has begun the consultation process on building a big domestic audit firm to match the sway of the Big Four. Business Standard explores the way forward, and brings the latest on the state of play

- RUCHIKA CHITRAVANSHI

Nearly eight years after Prime Minister Narendra Modi first flagged the idea of establishing a large Indian consultancy firm on a par with the global Big Four, the government has initiated a dialogue to identify regulatory hurdles and the way forward.

A concept note issued by the Ministry of Corporate Affairs (MCA) recently on creating an Indian multidisciplinary partnership (MDP) firm has raised longstanding issues, and analysts said addressing them would give a good start to this effort.

The Big Four — Deloitte, EY, KPMG, and PricewaterhouseCoopers (PwC) — are the world’s largest audit and accounting firms by revenue. All four are headquartered in London. In India, such consultancies are also known as multidisciplinary partnerships.

The MCA in its concept note said India needs to lessen its dependence on multinational corporations for “strategic audits and consulting” in order to strengthen its economic sovereignty and achieve the goal of an Atmanirbhar Bharat.

Not just self-reliance, the sheer size of the business, too, is a major factor behind the move. The government has acknowledged the growing size of the consulting business, which makes up a far larger share of the revenue potential and strategic influence in the professional services industry beyond just audit. The global consulting and auditing industry is valued at nearly $240 billion, the MCA note pointed out.

Other large non-western economies, too, are seized of this matter.

China, for instance, announced support for its top 10 domestic firms back in 2009, and ran specific training programmes focusing on management coordination and quality assurance. As a result of its interventions, the top 10 domestic firms grabbed a 25 per cent share of the Chinese market share by revenue from audit and assurance services in 2020, leaving the Big Four with 19 per cent.