Government wants CCI probe on Big 4 auditors
The govt wants its competition watchdog CCI to probe into issues of cartilisation and thwarting competition.
Sources tell ET Now that the big four audit firms EY, Deloitte, KPMG and PwC ‘abused’ their dominant position which the government wants the Competition Commission of India to investigate.
The latest pressure from the government comes amidst crackdown on audit firms for allegedly overlooking corporate governance lapses in certain companies.
The government also wants the antitrust to look into the Big Four’s role in creating entry barriers for Indian audit firms, one of the source, who did not want to be named, said.
According to a report by Prime Database the EY, Deloitte, KPMG and PwC, along with their affiliates, controlled nearly 60% of the country’s richest companies belonging to the Nifty 500 in 2017-18.
The proposed crackdown is similar to tougher norms being proposed in countries like the United Kingdom following high profile corporate collapses.
Tougher norms to check independence and address issues of conflict of interest are also being proposed in the Companies Act. The government is considering pruning the list of services an audit firm can offer including ban on tax advisory services, that comprises of nearly one-fourth of the Big Four’s revenue.
ET Now had also reported last month that the government is also looking to cap the number of clientele an audit firm can have and the fees that they can charge.