ICAI to finalise guidelines for international networks – report

The Institute of Chartered Accountants of India (ICAI) is preparing to finalise guidelines intended to enhance the framework for chartered accountant (CA) practices that wish to engage in international networks, the Hindu Businessline has reported.

According to ICAI president Charanjot Singh Nanda, the upcoming guidelines will tackle the challenges associated with forming partnerships or joining international companies.

Nanda was quoted by the news agency as saying: “We are releasing guidelines to address issues related to tying up with or becoming part of international firms or international networking. We will provide a complete checklist of dos and don’ts.”

He explained that this move aims to create a legally recognised network under the ICAI's jurisdiction.

The draft guidelines were available for public feedback until 16 July and are currently being reviewed by the institute.

They cover various elements such as network naming, registration, constitutional amendments and the submission of annual returns.

A significant aspect of the guidelines is the requirement for each overseas network to appoint a Nodal Officer, who will ensure that operations comply with ICAI regulations for all registered CA practices in India.

Additionally, domestic companies that are part of an overseas network must adhere to the ethical standards applicable to such networks while complying with local laws.

In conjunction with this, the ICAI plans to introduce a networking portal aimed at providing a digital platform for its members.

This portal is intended to facilitate professional networking, mergers, partnerships and collaborations, allowing members to connect and share resources.

Nanda noted that this initiative could particularly assist small and medium-sized companies in broadening their service capabilities.

Furthermore, the ICAI has completed the revision of its merger and demerger guidelines, which Nanda believes will promote a more proactive approach among companies.

Nanda added: “We will see firms merge, while both parties retain their seniority.”

The updated guidelines are designed to encourage mergers that can enhance market presence and operational effectiveness, allowing companies to demerge within a period of one to ten years while keeping their original name.

The guidelines also permit merging entities to freeze their names with the ICAI for up to ten years, ensuring that when unfreezing occurs, their establishment date and seniority are preserved.

However, it is specified that no professional activities should be conducted under a frozen company’s name.

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