A consultation paper to examine the existing provisions of law and make suitable amendments therein to enhance audit independence and accountability has been placed and need suggestions/comments.
- Whether to reduce the number of audits per one audit firm/ auditor?
- Whether to reduce or set the number of partners under one audit firm?
- How can those Big-4’s burden be reduced? Which other audit firms are in a position to compete with them and reduce the workload of Big4?
- Whether the auditors in listed companies to be appointed from a separate auditors ‘ panel to be repaired by NFRA?
- Whether non-audit services can be included in the list u/s 144?
- Whether the Joint Audit for bigger companies should be made compulsory?
- What should be the threshold for the bigger companies?
Economic Concentration of audit [Big 4] – Positive & Negative effects on the economy
Most of the large global corporations use the Big Four accounting companies to audit their financial statements.This audit industry concentration of listed companies is characterized by an oligopoly of “Big Four” audit firms and in large-company audits would result in inadequate levels of competition.
Finding a new auditor would be more complicated because
- Less competition in many geographic markets where some of these companies do not have a significant presence.
- The lack of sufficient auditing experience by the remaining companies, in particular industries.
- Many other businesses are not independent because of the provision of non-audit services
The Companies Act, 2013 provides mandatory audit firm rotation and non-audit services In order to tackle this economic concentration of audit. The main purpose of this provision is to increase the number of audit firms capable of carrying out the most complex audits.
Non-audit services not to be taken by auditors
It has been noted that some of the audit firms are observing self-regulation and are making decisions not to participate in non-attested work such as consultancy and transaction advisory services from listed companies that they are auditing. Such a move that comes in the midst of auditors who are facing heat in high-profile corporate scandals seems a welcome change. Deloitte announced recently that it will not underatake any non- audit services in public domain.i.e. listed entities with Banks & Insurance Companies in particular.
To know more Click here
Latest Updates
- Have You Reported Your Foreign Assets in Your Income Tax Return?Have You Reported Your Foreign Assets in Your Income Tax Return? In an increasingly globalized world, it’s common for Indian residents to hold assets or earn income abroad. However, what many fail to realize is that the Indian Income Tax Act mandates disclosure of foreign assets and overseas income in the Income […]
- A Beginner’s Guide to E-Filing Income Tax Return for FY 2024-25A Beginner’s Guide to E-Filing Income Tax Return for FY 2024-25 Filing your Income Tax Return (ITR) is not just about fulfilling a legal formality—it’s a vital part of your financial discipline. Every individual earning income in India is required to declare their income, deductions, and taxes paid during the financial […]
- Faking Tax Deductions? You Could Be Penalised Up To 200% Under Income Tax RulesFaking Tax Deductions? You Could Be Penalised Up To 200% Under Income Tax Rules New ITR-1 and ITR-4 Mandate Detailed Proof for Claims to Curb False Deductions Paying taxes accurately and on time isn’t just a legal obligation—it fuels public welfare and national development. To ensure compliance, the Income Tax Act prescribes […]
- Aadhaar OTP a Must for PAN Registration: New Income Tax Portal RuleNew PAN Registration Rule: Aadhaar OTP Verification Made Mandatory In a significant update, the Income Tax Department has introduced a mandatory Aadhaar-based OTP verification step for individuals registering their Permanent Account Number (PAN) on the official e-filing portal — www.incometax.gov.in. This change is designed to enhance security and ensure that only genuine users […]
- Income Tax Benefits for Senior Citizens: What You Can Claim in AY 2025-26Income Tax Benefits for Senior Citizens: What You Can Claim in AY 2025-26 As the Income Tax Return (ITR) filing season for Assessment Year 2025-26 begins, many taxpayers—especially senior citizens—are evaluating the deductions and exemptions they are entitled to. The Income Tax Act provides several tax concessions for senior and super senior citizens […]