Ministry of Corporate Affairs has formed an expert panel to study the regulation of audit firms. One of their key recommendations was to permit audit companies to offer legal services by reviewing and amending the Advocates Act, 1961.
This suggestion hasn’t found favour with law firms. The board maintains that growth of multi-disciplinary practice (MDP) organisations must be encouraged more and allowing auditors to expand their set of services is a huge step in the right direction.
“For Indian firms to evolve into global leaders in auditing, legal, consultancy, and ancillary services, it is necessary to rationalise the Advocate Act to facilitate the development of Indian audit firms as well as legal firms,” – states an excerpt from the panel’s findings.
The report reminds that the Society of Indian Law Firms had filed a writ to the Delhi Bar Council against the ‘Big 4’ (Deloitte, EY, KPMG and PwC) for unauthorised legal services.
However, legal firms themselves are branching out to MDPs like a private investigation for their customers and forensic operations among others. In fact, AZB Partners have allegedly appointed no less than six forensic professionals from EY.
According to a report by Economic Times previously, the MCA panel was firmly in favour of allowing global brand names for auditing companies. This is good news for their local and outsourced firms as they can legitimately use the Big 4 brand names.
If the suggestion to allow legal consultation and other services get incorporated in the Advocates Act, the Big 4 can provide legal services in India where no overseas law firms can. Something the Law Firm Association is keen on.
However, the panel is of the opinion that opening the gates to MNC law firms and international lawyers will only be beneficial in the long run.