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Accusations of protectionism by the Big Four against regulators in India are indicative of a fear among some accountants that the multinationals are coming to monopolise the market.
Given the surge in overseas investment and the fact that gross domestic product has grown by between seven and eight percent since last year, there remains a question mark over whether the Indian profession, as it stands, can cope with the sheer size of the demands of the global capital markets. Marc Barber reports
Scepticism from the accounting profession in India at foreign interference is arguably undermined by an inability to service the ever-expanding client base on the scale required. So perhaps the bickering between the councils of the Institute of Chartered Accountants of India (ICAI) and the Big Four is simply a token protest before the inevitable occurs. The Big Four firms refused to take part in this survey, although they reportedly already have 15 percent of the market. The IAB survey shows the mid tier firms growing annual fees by over one-quarter (26 percent), building on the momentum of recent years. The last IAB survey of the country in 2001 showed annual fee growth of 20 percent.
For some mid tier firms, the speed of change in the market is leading them to turn clients away. Robin Roy, international liaison partner for Haribhakti & Co, a member firm of Moores Rowland International - which in the year to September 2003 grew fees by 24 percent - acknowledges that there are difficulties in meeting client demand. He tells IAB: "A lot of people need to be employed for these business process outsourcing type of activities. There is a strain on the profession and therefore we [the profession in general] are also not getting good people who are becoming partners... So there's a staffing [and] training issue going on here. We [Haribhakti & Co] do not want to take on any work that we cannot deliver on time. So we are choosy about taking [on] assignments because of the volume of work we have on offer." To deal with this extra demand, Roy explains that Haribhakti & Co has recently taken on two new partners and an office in Mumbai, but adds, "We are also aware...