The Institute of Chartered Accountants of India (ICAI) is examining the possibility of permitting private equity investment in the non-audit businesses of accounting firms, with the objective of enabling greater growth in non-assurance professional services.
ICAI President Prasanna Kumar D stated that the proposal is being considered through a framework that would clearly distinguish assurance services from non-assurance activities. Under the approach being examined, assurance practices would remain independent and insulated from external private equity investment.
An internal committee is studying international models, regulatory frameworks and professional practices to assess how such a structure could be implemented while maintaining the independence and integrity of audit and assurance engagements.
The development comes as the accounting profession undergoes significant changes due to the growing use of artificial intelligence (AI) and emerging technology-driven professional services. ICAI is also evaluating the broader implications of AI for the profession and the evolving role of chartered accountants.
The proposed separation of assurance and non-assurance practices could potentially provide accounting firms with additional avenues for expansion while preserving the independence requirements associated with audit and assurance work. Any final framework would depend on ICAI's assessment of regulatory, professional and ethical considerations. CASansaar