In BSE500, 38% of companies are
audited by the Big Four(EY, Deloitte, PWC, KPMG) while the combined market
capitalisation of companies audited by Deloitte in BSE 500 would add up to a
third of the index.
But these numbers face a formidable challenge in the form of a set of regulations that will radically change the manner in which audit companies function in India. According to the Companies Act 2013, businesses will have to change their auditors after two terms of five years each from April 1, 2017. The government believes the move will enhance audit independence and audit quality that will further lead to more transparency and increased investor confidence.
The Face-off for the Big Four firms, the fight will open up on two fronts. One, they will have to face off between themselves and two, also slug it out with a pack of smaller Indian firms. These small firms are no slouches in terms of competition; they command a significant share of the audit market.
In the BSE 500, 62% of companies are still audited by non-Big Four firms and that includes some of India Inc's biggest companies. For example, Chaturvedi and Shah have been auditors of Reliance Industries, India's biggest private enterprise, for nearly four decades, Sharp and Tannan have audited Larsen & Toubro for over three decades, and Singhi & Co has reviewed Hindalco's books for over five decades.
But these numbers face a formidable challenge in the form of a set of regulations that will radically change the manner in which audit companies function in India. According to the Companies Act 2013, businesses will have to change their auditors after two terms of five years each from April 1, 2017. The government believes the move will enhance audit independence and audit quality that will further lead to more transparency and increased investor confidence.
The Face-off for the Big Four firms, the fight will open up on two fronts. One, they will have to face off between themselves and two, also slug it out with a pack of smaller Indian firms. These small firms are no slouches in terms of competition; they command a significant share of the audit market.
In the BSE 500, 62% of companies are still audited by non-Big Four firms and that includes some of India Inc's biggest companies. For example, Chaturvedi and Shah have been auditors of Reliance Industries, India's biggest private enterprise, for nearly four decades, Sharp and Tannan have audited Larsen & Toubro for over three decades, and Singhi & Co has reviewed Hindalco's books for over five decades.
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