The Institute of Chartered Accountants of India (ICAI) is examining the possibility of permitting private equity (PE) investment in the non-audit businesses of accounting firms, with the objective of creating a clearer distinction between audit and non-audit activities.
According to a report by The Economic Times, ICAI President Prasanna Kumar D indicated that the proposal is being considered around a structural separation of assurance and non-assurance services. Under the proposed approach, activities such as consulting, accounting and advisory services could potentially operate separately from audit and other assurance functions.
The proposed framework is intended to address concerns relating to auditor independence and conflicts of interest while exploring avenues for investment and growth in the non-audit segment of accounting firms.
The matter remains under consideration, and any implementation would depend on the regulatory framework and safeguards established by ICAI. CASansaar