ICAI Explores Private Equity Investment in Non-Audit Services of Accounting Firms

The Institute of Chartered Accountants of India (ICAI) is considering allowing private equity (PE) investment in the non-audit businesses of accounting firms.

. Consultancy, accounting and advisory services would fall on the non-assurance side and statutory audits, tax audits and compliance audits would remain part of the assurance practice. ICAI has formed an internal committee to study whether these two sides can be separated so that private investors can invest in non-assurance businesses. Audit practices would remain protected from such investment because auditors must remain independent and free from conflicts of interest and commercial pressure.

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Also Read:GST Portal Now Allows Appeals Against NIL or Zero Demand OrdersThe committee is studying how other countries have dealt with PE investment in accounting firms like their rules and ownership structures. If it recommends allowing such investment, the proposal will first require approval from the ICAI Council. Changes to the Chartered Accountants Act would then be required after consideration by the Central Government.