ICAI To Propose CA Act Changes To Help Indian Accounting Firms Scale Up

ICAI To Propose CA Act Changes To Help Indian Accounting Firms Scale Up New Delhi, Sep 22 (KNN) The Institute of Chartered Accountants of India (ICAI) is preparing proposed changes to the Chartered Accountants Act that could give Indian accounting and consulting firms greater flexibility to expand their operations and build larger professional services organisations, people familiar with the development said. The first draft of the proposals is expected to be ready within two months and will be considered by the ICAI Central Council before being submitted to the Ministry of Corporate Affairs. Any changes requiring an amendment to the Act would need Parliament’s approval. “We can say ICAI proposal will be ready in the next two months,” an ICAI official told The Economic Times. Greater Flexibility For Consultancy Services A key proposal is to amend the CA Act to allow measured deregulation of non-assurance services and provide chartered accountants with greater flexibility in consultancy and advisory work. ICAI is also considering formal recognition of aggregation structures and measures to facilitate capital infusion into Indian CA firms. The proposals are part of a broader effort to address regulatory and structural constraints that can limit the consolidation and expansion of domestic professional services firms. The move comes as the government considers ways to help Indian firms build greater scale and compete with global professional services networks such as EY, Deloitte, KPMG and PwC. Multidisciplinary Networks ICAI also plans to revise its 2021 networking guidelines and its 2006 guidelines governing practice in corporate form. The proposed networking framework could allow CA networks to include professionals and entities regulated under other laws, including company secretaries, cost accountants, advocates, engineers, architects and actuaries, along with ICAI-registered multidisciplinary partnerships and other professional entities. An ICAI official said, “The objective is to facilitate participation by professionals regulated under respective laws. This aims widening expertise and service capabilities and creating firms of greater institutional scale,” as quoted by ET. The broader framework is intended to enable firms to combine expertise across disciplines and expand their range of professional services. Support For Consolidation ICAI is also preparing policy recommendations covering infrastructure support, capital infusion, tax incentives for aggregation and removal of impediments faced by accountants undertaking government consulting assignments. Technology adoption has also been identified as an area requiring greater support as firms expand their capabilities. The institute has already taken steps to facilitate consolidation. Around 1,000 CA firm mergers were approved between February and August 2026, while 10 networking structures were formed during the period. In addition, 18 management consultancy companies were registered with ICAI. ICAI is developing CA Setu, a digital platform intended to facilitate collaboration among chartered accountants and firms through opportunities involving mergers, networking, LLP aggregation, referrals, specialisation and diversification. The proposed CA Act amendments, revised networking rules and aggregation measures remain at the formulation stage. They will first require consideration by the ICAI Central Council and the Ministry of Corporate Affairs, while legislative changes to the CA Act would ultimately require parliamentary approval. (KNN Bureau)