Building a Strong Foundation for Global Competition: Insights from ICAI President
In the era of global competition, it’s essential for Indian firms to scale up and compete with the Big Four. Charanjot Singh Nanda, President of the Institute of Chartered Accountants of India (ICAI), shares his thoughts on what it takes to build a strong foundation for Indian firms to thrive globally.
A Strong Foundation is Crucial
Nanda emphasizes that having a strong foundation is vital before entering the global competition with the Big Four. He suggests that large firms, envisioned by the government, should have at least 80-90 partners to achieve this goal. The first step to achieve this is identifying and appointing the right partners.
Upscaling Technical Capabilities
To effectively serve clients both domestically and internationally, it’s essential to build robust technical capabilities. This includes providing technical training to officers and staff. Nanda highlights the importance of creating a centralized database or portal to connect with potential firms that can be partnered with.
Financial Reporting and Transparency
Nanda also emphasizes the need for transparency in financial reporting. He believes that more than system failure, greed is the primary reason for financial irregularities. The Financial Reporting Review Board (FRRB) identifies and decides if the cases need a desktop review. A desktop review for firms involved in recent financial irregularities is ongoing, and it takes six-seven months to decide if there are any accounting irregularities.
Cooperation between ICAI and National Financial Reporting Authority
Nanda also touches upon the overlapping roles of ICAI and the National Financial Reporting Authority (NFRA). He emphasizes that both institutions must operate in sync with their respective mandates. A clear line of distinction should be followed without intermingling with each other and work in consonance with each other.
Ongoing Research Paper for SEBI
The ICAI President is also working on a research paper for the Securities and Exchange Board of India (SEBI). The paper will focus on how scams can be identified and communicated earlier. Nanda believes that this research paper will help in improving the financial reporting landscape in India.
Conclusion
In conclusion, Charanjot Singh Nanda’s insights highlight the importance of building a strong foundation for Indian firms to compete globally with the Big Four. This includes identifying and appointing the right partners, upscaling technical capabilities, and maintaining transparency in financial reporting. The ICAI President’s views offer valuable insights for Indian firms looking to scale up and compete in the global market.