The move would enable regulators for chartered accountants, company secretaries and cost accountants, among others, to take disciplinary action against their respective members for professional misconduct in MDPs, they said.
The lack of clarity over the regulatory framework remains one of the key issues before the government, which plans to facilitate the creation of MDPs where accounting and consultancy professionals can operate under a single firm structure.
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The corporate affairs ministry’s proposed framework envisages allowing advocates, engineers, architects and actuaries, alongside chartered accountants, company secretaries and cost accountants, to practise through the same firm.
The presence of multiple licensing regulators across professions has prompted calls for greater regulatory clarity before such firms are allowed.
One of the people cited earlier said some regulators, including those for lawyers and engineers, may not support the idea of having their members in an MDP regulated by another body. “Allowing respective watchdogs to regulate their respective members is, therefore, a viable option for MDPs,” he said.MDPs are central to the government’s plan to create large home-grown professional services firms capable of competing with the Big Four. Building scale could help Indian firms tap the estimated $240 billion global audit and consultancy market.
Current regulations restrict the formation of MDPs. Last year, the corporate affairs ministry issued an office memorandum seeking stakeholder comments on permitting such partnerships in India.
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Since then, deliberations have continued on the rules and regulations needed to govern MDPs and make them commercially viable.
The absence of large domestic firms has enabled the Big Four-EY, Deloitte, KPMG and PwC-along with Grant Thornton and BDO to dominate India’s audit and consultancy market.
Fewer than 1% of accounting firms in India have more than 10 partners. The government wants more Indian accounting and consultancy firms to achieve scale, build expertise and compete globally.