The tirade against the Big Four multinational consulting firms by a section of the 1,10,000-strong accounting fraternity in India is not new to the Institute of Chartered Accountants of India.

What is shocking, however, is that ICAI, which is the regulator of the accounting and auditing business in India, has maintained a studied silence on this issue for over 10 years.

Indian accountants face curbs on access to US
More foreign bookkeepers may deny access to Indians

This time, the battle against the Big Four has assumed political overtones with Swadeshi Jagran Manch convenor and chartered accountant S Gurumurthy methodically gathering evidence against it and compiling them in a white paper.

No less than Union human resource development minister Murli Manohar Joshi unveiled the white paper on Sunday, which in essence called for banning the multinational consulting firms. The Big Four against whom the wrath is targeted are KPMG, Deloitte Touche & Tohmatsu, PricewaterhouseCoopers and Ernst & Young.

Has the issue been blown out of proportion? And what is the institute doing about it? The general impression is that ICAI has done little to bring the multinational consulting firms under its regulatory purview.

It is not surprising that local chartered accountant firms are frustrated with the behaviour of the multinational consultants. The first and foremost issue is their very presence in India when it is the government's stated policy till now to bar their commercial presence in audit services in India.

Many of the multinationals have arrangements with local CA firms. For instance, Bharat S Raut is the domestic affiliate of KPMG in India. All audit services are handled by Bharat S Raut. This is also true of Ernst & Young and Deloitte Touche & Tohmatsu.

What is frustrating the domestic CAs is that several of the multinational consulting firms advertise themselves in the country. While advertising and soliciting clients by chartered accountants is strictly banned by the institute, the names of these firms appear in newspapers under some pretext or the other.

Recruitment ads are a case in point. The institute has done nothing till now to move against these. In private, many senior members of ICAI's executive council point out that several past presidents of the institute have taken up assignments with these very multinational consulting firms. That explains the reluctance to come down hard against these outfits, they claim.

Last year, the government had appointed a committee under chartered accountant Sunil Bhargava to suggest a negotiation strategy that India can adopt while talking about services under the World Trade Organisation multilateral framework.

The committee has, in three different reports presented to the department of company affairs, dealt in detail about opening up accounting services under General Agreement on Trade in Services.

In its first report, it discusses the accounting services and details the preliminary observations on requests received by other WTO members besides suggesting the approach. The same report has elaborated on the continued presence of the multinational consulting firms in India and their span of work including audit, through direct or indirect means.

In the second report, the committee has argued the need for emergency and safeguard measures for accounting services, to which developed nations are opposed.

In the last report, it has put forth its recommendations on the negotiation strategy India should adopt and the autonomous liberalisation measures that the institute and the government can initiate.

The reports have been accepted by the department of company affairs, which, along with its comments, has forwarded it to the ministry of commerce.

The recent outburst against the Big Four has woken the ICAI from its slumber. It has reactivated a committee set up under ICAI executive council member Jayant Gokhale to look into all aspects of the multinational firms' operations in India.

The seven-member committee, which includes a couple of CAs from the multinationals, is likely to submit a draft report to the institute's council by the end of this month. The institute will then take a view, which will be submitted to the government.

But in person, several of the members in the sub-committee acknowledge that multinationals have a significant market share in India despite the government not opening accounting services both under Mode 3 (commercial presence) and Mode 4 (movement of natural persons).

When there is no reciprocity in the countries where these multinationals are headquartered, why should they be allowed to operate in India? This is a question that is best answered by ICAI.