In a notification dated July 13 but published late Tuesday night, the ICAI said its Global Networking Guidelines, 2025, notified in February, have been “kept in abeyance until further orders”.
ET had, on July 7, reported that the institute could pause the guidelines and hold further talks with stakeholders to iron out the wrinkles.
Also read: Big 4 scores a win as ICAI pauses ‘global networking norms’
The guidelines encourage domestic accountancy firms to tie up with their global peers to set up shop in India but these require all such entities, including those with existing foreign collaborations, to register themselves with the institute.
These guidelines also require such entities to comply with certain business disclosure requirements, including the specific nature of global collaborations, and appoint partners of “good standing” within the firms as nodal officers for compliances, among other stipulations.
However, major audit firms with global affiliations in India, such as the Big 4, have opposed the registration and sharing of details with the ICAI, people familiar with the matter had told ET. They fear their global partners would refuse to share the required details, and any data leak could potentially compromise their operational secrets.Also, the move would raise their compliance burden, one of the people had said.
The corporate affairs ministry, too, also wanted stakeholder concerns to be addressed first for any effective implementation of the guidelines, he had added.
The matter was examined by the ICAI Council in its three-day meeting that concluded on July 1.
Also read: ICAI may pause global network guidelines to address stakeholder concerns
Senior ICAI officials had earlier said the guidelines would enable local entities to gain scale, aligned with the government’s vision of facilitating the creation of large home-grown accounting firms comparable to the Big Four.
The guidelines, they had said, were about enabling a larger number of Indian accounting firms to pursue global tie-ups for growth through a structured framework.
The compliance requirements were not onerous and aimed at improving operational transparency of such firms, especially about the collaboration, they had said.
Before these guidelines were issued by the ICAI, there was no formal framework governing such global tie-ups. Those with foreign tie-ups were earlier required to submit certain details with the ICAI by submitting a form. But even this practice was discontinued in 2021, as a formal framework on this was sought to be introduced.